Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKERin the Chair.

PRIVATE BUSINESS.

Private Bills [Lords] (Standing Orders not previously inquired into complied with),—Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That, in the case of the following Bills, originating in the Lords, and referred on the First Reading thereof, the Standing Orders not previously inquired into which are applicable thereto, have been complied with, namely:

Dartmouth Harbour Commissioners (Reconstitution) Bill [Lords]

Croydon Gas Bill [Lords].

Bills to be read a Second time.

Provisional Order Bills (No Standing Orders applicable), Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That, in the case of the following Bills, referred on the First Reading thereof, no Standing Orders are applicable, namely:

Norfolk Fisheries Provisional Order Bill.

Towy Fisheries Provisional Order Bill.

Taw and Torridge Fisheries Provisional Order Bill.

Bills to be read a Second time Tomorrow.

Sheffield Gas Company Bill,

Lords Amendments considered, and agreed to.

Neath Corporation Bill,

Read the Third time, and passed.

Yorkshire Electric Power Bill [Lords],

Read the Third time, and passed, without Amendment.

Ramsgate Corporation Bill [Lords],

Shepton Mallet Waterworks Bill [Lords],

Read a Second time, and committed.

Great Northern Railway Bill [Lords], (by Order),

Read a Second time, and committed.

Ministry of Health Provisional Order (No. 1) Bill (by Order),

Third Reading deferred till Monday, 12th June.

Oral Answers to Questions — GOLD (IMPORTATION).

Sir HARRY BRITTAIN: 1.
asked the President of the Board of Trade the reason for the notice displayed on British ships forbidding travellers, British or otherwise, from importing gold into this country?

The PRESIDENT of the BOARD of TRADE (Mr. Baldwin): There are no restrictions on the importation of gold into this country. The export of gold is, however, prohibited, save under licence. I was not previously aware of the existence of the notices referred to, and should be glad if my hon. Friend could furnish Inc with further particulars.

Sir H. BRITTAIN: I will furnish the right hon. Gentleman with one or two, notices.

Oral Answers to Questions — TRADE AND COMMERCE.

MERTON BOARD MILL COMPANY, LIMITED.

Mr. ERSKINE: 2.
asked the President of the Board of Trade whether a sum of £100,000, or some other amount, has been granted to the Merton Board Mill Company, Limited, under the Trade Facilities Act, to purchase German machinery; and why was this sum granted, seeing that the object of this Act was to provide work in this country?

The FINANCIAL SECRETARY to the TREASURY (Mr. Hilton Young): The entire proceeds of the guaranteed loan will be spent in this country. The answer to the first part of the question being, therefore, in the negative, the second part does not arise.

COTTON

Mr. A. M. SAMUEL: 10.
asked the President of the Board of Trade whether he is aware that statistical estimates show that the supplies of American raw cotton are likely to fall below the world's demand by the end of the current 12 months, and that there is a probability of serious interference with the British cotton industry until the 1923 American crop becomes available; and whether he will take steps to urge for increases in the current year's production of British-grown cotton?

Mr. BALDWIN: I am aware that the estimates to which my hon. Friend refers are causing anxiety in the British cotton industry. Every effort is being made to develop as expeditiously as possible the production of cotton within the Empire, but I am bound to point out no relatively large amount is likely to be obtained immediately from that source.

Mr. SAMUEL: Could the right hon. Gentleman publish these statistics, so that growers in the Dominions and colonies might see exactly the position?

Mr. BALDWIN: I will consider that.

DYESTUFFS.

Mr. T. THOMSON: 24.
asked the President of the Board of Trade if his attention has been called to the report made by the Chairman of the British Cotton and Wool Dyers' Association complaining of the difficulty of obtaining colours which the trade require, and also of the delay and the injurious effect resulting to the dye industry, and complaining that the mixtures offered are usually unsatisfactory, leading to considerable trouble and involving claims and consequent heavy loss; and whether, in view of the dissatisfaction now prevailing with regard to the dye question, he is prepared to appoint a committee to investigate the administration of the Dyes Regulation Act?

Mr. BALDWIN: I have read the speech to which the hon. Member refers, and the perusal of it as a whole does not suggest that there is any need for the appointment of such a committee as he proposes.

Mr. THOMSON: Is not the right hon. Gentleman aware that there are a number
of cases where the proper dyes cannot be obtained owing to this restriction, and does not that hinder trade?

Mr. BALDWIN: The hon. Gentleman must recollect that the trade is in constant communication with the Committee at my office, and if there was any strong desire for the investigation such as that advocated by the hon. Gentleman, I should certainly have heard of it. I have not been pressed on the subject at all.

Mr. KILEY: Is the President not aware that it costs 400 per cent. to 800 per cent. more in some cases to obtain some of the dyes than in 1913?

Mr. BALDWIN: Figures are apt to be misleading!

Captain WEDGWOOD BENN: Does the right hon. Gentleman propose to make any comment on the resignation of Mr. Levinstein and the reasons alleged?

Mr. BALDWIN: There is a question on that subject later.

Major MACKENZIE WOOD: 54.
asked the President of the Board of Trade the weight and value of reparation dyes handed over by his Department to the Central Importing Agency during the financial year 1921–22; whether he can give the amount realised for them and the amount of commission paid to the Central Importing Agency for the sale; if he can say what commission the Central Importing Agency charge to purchasers; and whether he is now prepared to put these goods up for competitive tender rather than give the monopoly to one firm?

Mr. BALDWIN: The quantity of reparation dyes handed over by the Board of Trade to the Central Importing Agency during the financial year 1921–22 was 686 tons, valued at 33,300,000 paper marks. The amount realised during the year 1921–22 from sales was £293,323, and the commission paid to the Central Importing Agency on those sales and in respect of services rendered in connection with dyestuffs allocated to the Dominions was £18,020. A charge is made by the Agency, on sales which they make, of 1 per cent., which is accounted for to the Board of Trade. As regards the last part of the question, I must point out that even if the reparation dyestuffs were sold by tender, as suggested by the hon. Member,
some organisation would be required to carry out the services at present carried out by the Agency.

TRADE CATALOGUES.

Mr. KENYON: 53.
asked the President of the Board of Trade what countries or dominions, other than Australia, levy duties upon British trade catalogues; and, if there are such, will he state the amount of duty so levied?

Mr. SALDWIN: All the British self-governing Dominions and a considerable number of foreign countries levy duties on trade catalogues. The regulations affecting the liability to, and the amount of duty, are somewhat elaborate, but I am having a statement on the subject compiled on the basis of the information available. This will take a little time to prepare, but I will send it to the hon. Member as soon as it is completed.

Oral Answers to Questions — PEACE TREATIES.

COMPENSATION AWARDS (BRITISH NATIONALS).

Mr. DOYLE: 3.
asked the President of the Board of Trade whether, in view of the prolonged delay in the payment of compensation awards granted by the Mixed Arbitral Tribunal to British nationals and of the very great inconvenience arising from such non-payment to the persons and firms concerned, and to the fact that no information as to when such awards are likely to be paid can be oh-tamed from the Controller of the Clearing Office (Enemy Debts), he will give information to the House of the position as it is known at the present time respecting the total realised value of German property in England, the estimated value of the property still to be liquidated, the total claims paid under Section 293 of the Treaty of Versailles, the debts paid, the debts outstanding and likely to be admitted, and the total claims under Section 297 of the same Treaty as to the proceeds of liquidation claim, the proceeds of liquidation paid, the total compensation claims put in, and the total compensation claims awarded to date; and what prospect there is of a payment on account of such awards being made at an early date?

Mr. BALDWIN: The total realised value of German property in England up to date is £33,278,000, part of which will have to be accounted for to other custodians. With regard to the second part of the question, I would refer the hon. Member to the reply given to the hon. Member for Kirkcaldy (Mr. Kennedy) on the 22nd May. With regard to the remaining figures, particulars of which are requested, I would refer to the replies given to the hon. Member for Wimbledon (Mr. Hood) on the 21st March. Since that date a further £1,226,354 has been paid to British creditors under Article 296, and a further £1,611,179 has been paid to British claimants under Article 297 in respect of the proceeds of liquidation of their property in Germany. The claims still outstanding under Article 296 amount to £25,430,128, to which interest up to the date of admission must be added. I am unable to estimate what proportion of these is likely to be admitted. The total amount of compensation claims awarded by the Mixed Arbitral Tribunal to date is £2,246,273. With regard to the last part of the question, I regret that it is not possible at the moment to make any statement.

GERMAN NATIONALS (PRIVATE PROPERTY).

Lieut.-Commander KENWORTHY: 4.
asked the President of the Board of Trade approximately the estimated sterling value of the private property of German nationals held outside German territory which has been liquidated under the terms of the Treaty of Versailles; and, approximately, in sterling, the estimated value of private property belonging to foreigners in Russia which has been liquidated by the Soviet Government of Russia since and during the Russian revolution?

Mr. BALDWIN: No, Sir; I have not information sufficient to enable me to do so.

Lieut. Commander KENWORTHY: How is it that the Board of Trade has not got any estimate of the value of private property belonging to Britishers in Russia?

Mr. BALDWIN: The hon. and gallant Member spoke of private property belonging to foreigners. If he means British private property, perhaps he will put another question.

ENEMY ACTION (CLAIMS COMMISSION).

Mr. HOWARD GRITTEN: 46.
asked the Lord Privy Seal whether the members of the Commission on reparations to sufferers from enemy action in this country are being paid for their services; and, if so, whether he will state the amounts which have so far been paid and are continuing to be paid?

Mr. YOUNG: The members of the Royal Commission on Compensation for Suffering and Damage by Enemy Action receive no remuneration for their services. The second part of the question does not, therefore, arise.

Mr. GRITTEN: Is the hon. Gentleman aware that the sufferers by the German bombardment of the Hartlepools in 1914 have been waiting no less than 7½ years for compensation, and that many of them are in a state of destitution? Are these poor people to wait for a further indefinite period before getting compensation?

Mr. YOUNG: Clearly that does not arise out of the question.

Mr. GRITTEN: But you have a Commission dealing with this question.

Mr. YOUNG: If my hon. Friend has any complaints to make, I am sure if he will bring them to the attention of the Commission, who are working most assiduously and giving the matter every attention that hard work can ensure, they will be attended to; and if he can give me any particulars I shall be happy to look into them.

Mr. GRITTEN: I have sent in to the Commission petitions signed by hundreds of people, but the Commissioners have not expedited their proceedings on that account.

LOSS OF S.S. "EGYPT."

Captain Viscount CURZON: 5.
asked the President of the Board of Trade whether it is intended to set up a special inquiry to inquire into the circumstances attending the loss of the Peninsular and Oriental liner "Egypt"; whether this ship was supplied with Carley rafts; if so, how many; how many lifeboats were carried by the ship; in how many cases were attempts made to launch them; how many
were successfully launched; how many hours the ship had been at sea; whether the passengers and crew had all been given boat. stations; whether any drills had been carried out to ensure that they were acquainted with the details; whether each passenger and member of the crew was furnished with a lifebelt of approved pattern before sailing; and whether each passenger and member of the crew had had an opportunity of becoming familiar with the wearing and use of such a belt before sailing?

Mr. L'ESTRANGE MALONE: 6.
asked the President of the Board of Trade whether the formal investigation into matters concerning the loss of the Peninsular and Oriental steamship "Egypt" is a public or private inquiry: whether any report has yet been issued, and, if so, what report; or, if not, will the findings of the inquiry be made public?

Mr. BALDWIN: As I informed the House on 24th May, a formal investigation will be held into the loss of the "Egypt," and that investigation will cover all material points affecting the loss of the ship and the loss of life. A note has been made of the specific points mentioned in the questions. The inquiry will be a public one, and the Report will be published.

Mr. W. THORNE: Is the right hon. Gentleman going to inquire into the advisability of carrying no more lascars on these boats?

Mr. MALONE: Will the right hon. Gentleman see that compensation is paid to relatives of the native crew as well as the white crew?

Viscount CURZON: Will the Report of the inquiry be available to the public, or will the inquiry be a public one?

Mr. BALDWIN: I announced to the House last week that the inquiry will be public.

Captain CRAIG: Will not the inquiry in this case be the ordinary Board of Trade inquiry, which is always public?

Mr. BALDWIN: Yes.

Colonel Sir CHARLES YATE: Will differentiation be made between Goanese stewards and lascar seamen?

Mr. BALDWIN: No doubt the full facts will be brought out in the investigation.

Mr. GILBERT: 11.
asked the President of the Board of Trade what are the Regulations imposed by his Department on ocean-going passenger steamers flying the British flag sailing from home ports as regards wireless operators; must each vessel carry a minimum number of such operators, and has the number to be increased according to the number of passengers carried by each vessel; and whether such Regulations apply to all vessels, irrespective of whether their voyages are long or short?

Mr. BALDWIN: I am sending the hon. Member a copy of the Merchant Shipping (Wireless Telegraphy) Rules, 1920, which will, I think, give him the information he requires.

Mr. GILBERT: 12.
asked the President of the Board of Trade whether there is any Order or Regulation made by his Department respecting the crews to be carried by mail steamers leaving British ports carrying passengers; whether such Regulations provide for all or any part of the crew carried to be British; whether such steamers are allowed to carry lascar or other foreign crews; and, if so, is there any Regulation governing the proportion of such lascar or foreign crews who may be employed on British vessels from home ports?

Mr. BALDWIN: I am informed that in all contracts entered into by the Post Office with steamship companies for the carriage of mails a Clause is inserted to the effect that the master and officers and at least three fourths of the crew of every mail ship shall be British subjects. The majority of the seamen described as "lascars" are British subjects. The only statutory requirements in regard to the employment of aliens on British ships are contained in Sections 5 and 12 of the Aliens Restriction (Amendment) Act, 1919, where no distinction is made between cargo ships and passenger ships.

Mr. WILLIAM SHAW: 59.
asked the President of the Board of Trade whether the Peninsular and Oriental liner "Egypt' carried a hydrophone; and if he will consider the advisability of introducing legislation to make it compulsory for all passenger steamers to be equipped with hydrophones?

Mr. BALDWIN: All material points affecting the loss of the ship or the. loss
of life will be dealt with in the formal investigation into the loss of the "Egypt." A note has been made of the hon. Member's suggestion.

OIL (NAVIGABLE WATERS).

Lieut. Commander KENWORTHY: 8.
asked the President of the Board of Trade whether his attention has been called to the heavy mortality among sea birds around our coasts caused by the presense of large quantities of heavy oil discharged from vessels; and whether he will consider whether it would he possible, either by issuing Regulations for our territorial waters or by appealing to mariners, or by both, to diminish this destruction of bird life?

Lieut.-Colonel CAMPION: 9.
asked the President of the Board of Trade whether he is aware of the great injury done to wild birds and fish around our coasts owing to the wastage of oil from ships; and whether he proposes to introduce any Regulations to deal with the matter?

Mr. BALDWIN: The question of the escape of heavy oil has been carefully considered in conjunction with the authorities and interests concerned during the past year, and a Government Bill on the subject, the Oil in Navigable Waters Bill, has been introduced in another place.

Lieut.-Commander KENWORTHY: In view of the fact that there must be some delay in getting this admirable legislation passed, will the right hon. Gentleman consider making a public appeal, with his great authority, to avoid this injurious practice? I think that would do some good.

Mr. BALDWIN: I doubt whether that would do much good, but I hope the Bill will get through quickly. It is a non-contentious Bill.

Oral Answers to Questions — SAFEGUARDING OF INDUSTRIES ACT.

VACUUM FLASKS.

Mr. CHARLES WHITE: 13.
asked the President of the Board of Trade why laboratory vacuum flasks are liable for duty under the Safeguarding of Industries Act, whilst ordinary vacuum flasks
are exempt as not being scientific appliances or instruments, in view of the fact that many glass articles, in the nature of toys, are also dutiable?

Mr. BALDWIN: Laboratory vacuum flasks are included in the list of articles dutiable under the Safeguarding of Industries Act, because they fall within the scope of the general heading, "scientific glassware," in the Schedule to the Act. Ordinary vacuum flask food containers cannot properly be regarded as included in this or in any other general heading of the Schedule, which is the only question which the Board of Trade have to determine.

REFEREE (FEES).

Mr. C. WHITE: 14.
asked the President of the Board of Trade what was the total amount of fees payable to the Referee appointed under the Safeguarding of Industries Act for the period ending 31st March?

Mr. BALDWIN: I am not in a position to make a definite statement on this matter, but the total fees payable to the Referee under Section 1 (5) of the Safeguarding of Industries Act up to the 31st March will not exceed 700 guineas.

GLASS CONTAINERS.

Mr. GEORGE THORNE: 15.
asked the President of the Board of Trade whether the scope of the glass bottle Inquiry, at present being conducted under Part II of the Safeguarding of Industries Act, extends to glass containers of all kinds, or whether it is confined to narrow-neck bottles, or what definition the Board of Trade is proceeding upon?

Mr. BALDWIN: The complainants have specifically limited their complaint to "all containers of five inches or less in internal diameter of the opening of the mouth." The inquiry is also limited to empty bottles.

ACETIC ACID.

Mr. G. THORNE: 16.
asked the President of the Board of Trade what proportion of the £42,353 worth of acetic acid imported into this country during the six months ended 31st March last represented grades which have since been deleted from the list of dutiable commodities?

Mr. BALDWIN: The particulars required to be furnished with respect to acetic acid imported during the period specified did not necessarily distinguish between the various grades of that commodity, and I am consequently unable to furnish the information desired.

OPTICAL AND SCIENTIFIC INSTRUMENTS.

Dr. MURRAY: 20
asked the President of the Board of Trade (1) whether under the Committee appointed by him to consider the application for the imposing of an additional 33⅓ per cent. duty upon spectacles and spectacle frames, the investigations covers all kinds of spectacle frames, whether made of gold, rolled gold, steel, aluminium, horn, celluloid, or other materials, or if it would be sufficient to show that any one kind of spectacle frame is being imported into the United Kingdom under the depreciated currency conditions contemplated by the Safeguarding of Industries Act, as suggested by the applicants now appearing before the Committee, in order to have all kinds of frames included in the Order asked for:
(2) whether the terms of reference of the Optical and Scientific Instrument Committee appointed by him include calculating apparatus, cylinders and slide rules, also electrical goods and instruments, ammeters, voltmeters, etc., seeing that the total imports from all countries for six months only amounted to £5,239; if not, if he will in appointing further Committees clearly state what their terms of reference include, and thus avoid the labour and expense involved in the preparing of statements and the bringing of witnesses, often from a long distance, before the Committee, to state there is no justification for the making of an Order;
(3) whether he has appointed a Committee to inquire into the imports of optical and scientific instruments; and, if so, whether their terms of reference include dental, surgical, and medical instruments and appliances, seeing that the total imports of these articles from all countries for the six months ending 31st March amounted only to £111?

Mr. FOOT: 19.
asked the President of the Board of Trade whether he is aware that, under the title of optical and scientific instruments and optical elements, over 1,000 different articles are embraced,
and that it was stated before the Committee who are considering the application for the imposing of an additional 33⅓ per cent. duty upon these goods, that it is not necessary to consider each article, but only one or two, as the recommendation in regard to these would apply to all others; and whether he will say if this proposal has received his sanction, in view of the divergent nature of the commodities referred to?

Mr. BALDWIN: The terms of reference to the Committee cover optical elements and optical and other scientific instruments, and the Committee are directed to report whether the conditions laid down in the Act are fulfilled with regard to all or any particular varieties of such articles. The Committee will no doubt exercise their discretion as to how far they should require separate evidence in regard to any particular variety of instruments concerned; they will also no doubt bear in mind their terms of reference in deciding whether or not to admit evidence in regard to any particular class of article. Spectacle frames are not included in any of the lists which have been issued by the Board of Trade defining the general descriptions of goods mentioned in the Schedule to the Act under the headings of optical elements and optical or other scientific instruments, nor do they fall under the general descriptions given under these headings in the Schedule. The import figures quoted in Questions 21 and 22 are quite inaccurate, as they are not the value of the goods, but the amounts of duty collected thereon.

IMITATION PEARL NECKLETS.

Mr. T. THOMSON: 23.
asked the President of the Board of Trade if he is aware that children's imitation pearl necklets made of glass, imported from Japan, are being held up by the Customs authorities as being liable for duty under the key section of the Safeguarding of Industries Act, on the ground that they are manufactured by the process known as lamp blown, when imported loose or on strings of cotton, but when imported on silken threads, which silken threads would represent 90 per cent. of the value of the completed article, they are admitted free; and is he prepared to amend the key section of the Safeguarding of Industries Act so as to remove anomalies of this kind?

Mr. BALDWIN: I am not aware of any specific case of necklets threaded on silk to which the hen. Member's statement is applicable; and, consequently, the second part of the question does not arise.

GOVERNMENT POLICY.

Captain W. BENN: 49.
asked the Lord Privy Seal whether he can now announce the Government's decision as to the enforcement of the Safeguarding of Industries Act?

Mr. CHAMBERLAIN (Leader of the House): I am sorry to say that, owing to the pressure of other business, the Government have not been able to discuss this question, and I doubt now very much whether I shall be able to make any statement on the subject before the Recess.

REPORTS (PUBLICATION).

Mr. T. THOMSON: 51.
asked the President of the Board of Trade if, in the case of complaints made under Part II of the Safeguarding of Industries Act which are dismissed by him without reference to Committees, he has decided not to lay any Papers before the House, whereas, in the case of complaints which are referred to Committees and unfavourably reported upon, he still intends to publish Reports; and, if this is so, what reason exists for making such discrimination?

Mr. BALDWIN: The answer to the first part of the question is in the affirmative. As regards the second part of the question, I would point out that the proceedings of the Committees of Inquiry are public, and there is therefore a clear distinction between the Reports of the Committees and the Departmental conclusions on complaints which do not form the subject of public inquiry.

SCHEDULED ARTICLES.

Mr. KENYON: 52.
asked the President of the Board of Trade if he can give, for the period 1st October to the 31st March last, the quantities imported (and the values) of the commodities listed by the Board of Trade under the Key Industries Schedule in Lists A, B, C, D, E, F, G, and H, respectively: and if he will at the same time state what amount of these values represent commodities which have now been deleted from the Board of Trade lists as the result of decisions given by the referee?

Mr. BALDWIN: I am consulting the Board of Customs as to the feasibility and cost of extracting the information desired by the hon. Member, and will communicate with him later on the subject. Meanwhile I may point out that no commodities included in the first seven of the eight lists mentioned by him have been deleted in consequence of decisions of the referees.

APPEALS.

Mr. KILEY: 56.
asked the President of the Board of Trade if he can arrange, in reference to the appeals before the referee under the Safeguarding of Industries Act, that the decisions of the referee shall be accepted as decisions in principle, and thus avoid the needless duplication of appeals, involving, as they do, delays, labour, and heavy financial cost: and is he aware that this was promised during the passing of the Act?

Mr. BALDWIN: Where it is perfectly clear that the learned referee has laid down, as the basis of any decision, general principles by which he will govern himself in the consideration of pending complaints, such principles have been and will continue to be carefully considered, with a view to obviating hearings so far as possible.

DUTCH GOODS.

Mr. KILEY: 58.
asked the President of the Board of Trade whether a commercial treaty exists between this country and Holland, the terms of which would prevent the making of an Order under Tart II of the Safeguarding of Industries Act imposing upon imported Dutch goods a duty greater than any duty charged by the Dutch Customs authorities on similar goods imported into Holland from Great Britain?

Mr. BALDWIN: No, Sir! Article I of the Treaty of 1837 between this country.and the Netherlands prohibits the imposition on Dutch goods imported into this country of duties higher than those levied on similar goods imported from any other foreign country. This Clause would prevent the imposition, under the Safeguarding of Industries Act, of a duty on Dutch goods on the grounds of depreciation of Dutch currency in relation to sterling; but I would remind the hon. Member that Dutch currency is not so depreciated.

Mr. KILEY: Did the right hon. Gentleman not appoint a Committee to inquire into the importation of bottles from Holland, and, if so, what was the object, if such articles cannot be imported?

CAMERAS.

Captain BENN: 60.
asked the President of the Board of Trade whether out of 347,000 cameras imported during the year 1921 only 13,000 came from Germany; and whether, in these circumstances, he can explain why he has appointed a Committee under Part II of the Safeguarding of Industries Act to consider an application for a further duty of 33⅓1 per cent. on the ground that cameras imported from Germany are causing serious unemployment in the camera industry?

Mr. BALDWIN: The precise figures, as stated in reply to the hon. Member for Whitechapel on the 23rd May, are 324,998 cameras imported from all countries in 1921, of which 13,233 were consigned from Germany. The great bulk of the imports come from the United States of America, and consist of a class of camera which, I am informed, is not strictly competitive with the general range of British-made cameras. In referring the matter to a Committee, the Board of Trade were satisfied that the volume of imports from Germany, considered in relation to the present output of the optical and scientific instruments industry in this country, of which the manufacture of cameras forms a part, was such as to exercise a serious effect on employment in that industry.

GLASS BOTTLES.

Captain BENN: 66.
asked the President of the Board of Trade whether the Committee of Inquiry which is investigating the complaint of the Associated Glass Bottle Manufacturers' Association under Part II. of the Safeguarding of Industries Act has received any instructions from the Board of Trade as to excepting from the scope of this inquiry any bottles which may be imported into this country already filled: and whether he will withdraw this instruction, seeing that it would discriminate very harshly against those British manufacturers who import empty bottles in order to fill them in this country?

Captain COOTE: 65.
asked the. President of the Board of Trade whether his attention has been drawn to the alarm created in the minds of manufacturers of table waters by his decision that any order made under Part II of the Safeguarding of Industries Act, as a result of the Report of the Committee at present inquiring into the case of glass bottles, will not apply to filled bottles; and whether, to avoid giving a preference to the foreign manufacturer at. the expense of the home producer, he will make any such order apply to filled glass bottles.

Mr. BALDWIN: I have received no representations to the effect indicated in the latter question. The complainants having specifically restricted their complaint to empty bottles, the Board of Trade informed the Committee that their terms of reference were to be understood as relating only to empty bottles and not to filled bottles. The users of empty bottles will, of course, have full opportunity to give evidence before the Committee on the effect which the imposition of a duty would exert on employment in their respective industries. If a complaint is made with regard to filled bottles, the Board will consider whether anyprimâ facie case exists for reference to the Committee.

Captain BENN: Does not the taxation of empty bottles, and not full bottles, put a bounty on the industry of filling the bottles abroad?

Mr. BALDWIN: I think an interesting point will arise.

Mr. W. THORNE: Is not the right hon. Gentleman sick and tired of answering these questions day after day, and will he recommend the repeal of the Act?

Oral Answers to Questions — RUSSIA.

MRS. S. HARDING.

Sir W. DAVISON: 25.
asked the Prime Minister what was the result of the representations which were made by the British delegates at Genoa to the representatives of the Russian Soviet Government with regard to the failure of the Soviet Government to make the reparation demanded by the Secretary of State for Foreign Affairs for the outrageous treatment accorded to Mrs. Stan Harding, a British subject, during her
imprisonment on a false charge for five months by the orders of the Russian Soviet Government, who had given her a safe-conduct to visit Russia?

The PRIME MINISTER (Mr. Lloyd George): The negotiations at Genoa with the Soviet Government did not reach a stage where individual claims could be brought forward for consideration, and it was, therefore, impossible to discuss the ease of Mrs. Stan Harding. There may be opportunities at the forthcoming Conference at The Hague for the presentation of such claims.

Sir W. DAVISON: Does not the right hon. Gentleman think that it. is most desirable that these outrages on British subjects should be gone into, and the grievances of Britishers redressed before we go into those of others?

The PRIME MINISTER: There are several other cases, including this, which we are pledged to bring forward.

Sir W. DAVISON: Does not the right hon. Gentleman see that this case, which has been in abeyance for many months, should be attended to?

The PRIME MINISTER: There are many cases which are much older than this and just as grave as this one.

BRITISH TRAWLERS (PROTECTION).

Major ENTWISTLE: (by Private Notice) asked the Under-Secretary of State for Foreign Affairs whether instructions have been given for the withdrawal on the 28th instant, of His Majesty's Ship "Harebell" from the Murman coast and White Sea Fishery areas, and, if so, whether, in view of the recent illegal arrests of British trawlers off the Murmansk coast, the Government will take steps to retain the "Harebell" in those waters until adequate alternative protective measures can be provided to safeguard the rights of British fishermen?

The PARLIAMENTARY SECRETARY to the ADMIRALTY (Mr. Amery): I have been asked to reply. In view of the probability of the fishing season in North Russian waters finishing somewhat later this year than normally, His Majesty's Ship "Harebell" will not be withdrawn for the present.

BEER (PRICES).

Sir GEORGE RENWICK: 28.
asked the Prime Minister whether, with a view of allaying the widespread dissatisfaction at present existing in the manufacturing and mining districts of the country owing to the high price and low quality of the beer obtainable in licensed houses and working men's clubs, he will appoint a Committee to inquire into the causes of the high price and low quality and to endeavour to suggest a means of removing the causes of dissatisfaction?

Mr. DOYLE: 29.
asked the Prime Minister whether, in view of the increasing discontent and dissatisfaction existing amongst the industrial and other sections of the community at the high price and low quality of beer sold in licensed houses and workmen's clubs, he will take such measures as may be necessary to remedy this regrettable state of affairs?

The PRIME MINISTER: I have no doubt that one of the main causes of the present price of beer is the high duty which it is unfortunately necessary to charge for revenue purposes; and I do not think that the appointment of such a Committee as my hon. Friend suggests could serve any useful purpose at the present time.

Mr. DOYLE: Has the right hon. Gentleman been made aware, since his return, of the enormous amount of discontent and unrest which has been caused by this matter, and cannot it be dealt with?

The PRIME MINISTER: Yes, that is so: but unfortunately, owing to the necessities of the Revenue, it is quite impossible to take off these high duties. It would be very desirable if the duties could be taken off many commodities which are consumed by the people.

Mr. W. THORNE: If an Amendment is tabled on the Finance Bill with a view to reducing the duty on spirits and beer, will the Government back it up?

Lieut.-Colonel J. WARD: Can the right hon. Gentleman inform the House how it is that in spite of the fact that now, as compared with two years ago, many things are down—wages down at least 100 per cent., those also of the workers employed by the brewery companies and everything else are down—that the price of beer cannot be reduced?

Mr. SPEAKER: That question had better be put down on the Paper!

RETIRED NAVAL OFFICERS (DEPUTATION).

Major Sir B. FALLE: 30.
asked the Prime Minister if he can now name a date on which it will be convenient for him to receive the deputation of retired naval officers asked by the petition of 228 Members of this House?

The PRIME MINISTER: I hope to be able to arrange to see a deputation on this subject as soon as possible after the House re-assembles after the Whitsuntide Recess.

EGYPT (MURDER OF BRITISH SUBJECTS).

Lieut.-Colonel JAMES: 31 and 80.
asked the Prime Minister (1) whether any representations have been made to the Egyptian Government to the effect that the repeated murders of British subjects cannot be tolerated and will imperil the future of pending negotiations; whether compensation on the most generous terms has been demanded on behalf of the dependants or in the case of attempted murder or malicious injury of the victims:
(2) whether he is in a position to give any details as to the recent assassination of the assistant-commandant of police in Cairo; and whether he has any information that there is in Egypt a widespread organisation for the murder of British subjects?

Mr. ORMSBY-GORE: 84.
asked the Under-Secretary of State for Foreign Affairs whether the murderer of Bimbashi Cave has yet been arrested and whether both the British military authorities and the Egyptian Government have taken any steps to ensure against further similar outrages by more energetic measures against the small gang of extremists who were implicated in the plot on the life of the Prime Minister in Egypt and against the lives of British officials serving in Egypt?

The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Cecil Harmsworth): Bimbashi W. F. Cunliffe Cave, while returning home about
1.30 p.m. on 24th May, was shot dead in that quarter of Cairo where most of the Egyptian Ministries are situated. His assailants, who are reported to have been three in number, escaped. Within the last three months attempts have been made on the lives of no fewer than seven British subjects in Cairo, but in no instance have any arrests been made. In view of their failure to check this series of outrages, Lord Allenby has been instructed to make the strongest possible representations to the Egyptian Government, who are being informed that His Majesty's Government will hold thorn responsible for indemnifying such foreigners or foreign officials as have been injured, or their heirs should the victims have succumbed.

Lieut.-Colonel JAMES: May I ask you the last part of my first question: Whether generous compensation has been demanded?

Mr. HARMSWORTH: Yes, Sir, I think I may confidently say that.

Mr. ORMSBY-GORE: Do we understand that Lord Allenby is taking any steps himself, or is he relying on the Egyptian Government?

Mr. HARMSWORTH: The Egyptian Government would be the normal authority, but I can assure the hon. Gentleman that Lord Allenby regards this matter as a most serious one, and he is taking every possible step in regard to it.

Mr. ORMSBY-GORE: Is it not a fact that the gang suspected of carrying out these murders are foreigners, and is the same gang that attempted the life of the Premier—not the present one—and have not the Military Intelligence Department got a very considerable amount of evidence about this murder gang?

Mr. HARMSWORTH: I am not sure of that I will look into it.

Oral Answers to Questions — IRELAND.

DISBANDMENT (IRISH REGIMENTS).

Rear-Admiral ADAIR: 33.
asked the Prime Minister whether any provision is being made to meet the case of loyal Irishmen disbanded from the Irish regiments being unable to return to their homes in Ireland in consequence of danger incurred in so doing?

The SECRETARY of STATE for WAR (Sir Laming Worthington-Evans): I have been asked to answer this question. These men, unless retained in the Army by transfer, will receive the same benefits as those provided by Army Order 180 for other men compulsorily discharged. If any of them are unable to return to their homes in Ireland, their cases should be brought before the Committee presided over by the hon. and gallant Baronet the Member for Chelsea.

Rear-Admiral ADAIR: As a matter of fact, are the Government alive to the fact that officers are included as well as rank and file in this question, and is there not very grave danger to these officers if they return to Ireland?

Sir L. WORTHINGTON-EVANS: Officers are, of course, included in this Order; my answer applies to them equally with the men.

Sir S. HOARE: Is the right hon. Gentleman aware that my Committee deals only with cases in which the applicants are in urgent need, and that this question deals with cases of people who wish for protection—a matter my Committee were nothing whatever to do with?

Sir L. WORTHINGTON-EVANS: This reference I make to the Army Order shows that I hope there will be no urgent financial need; but there may be exceptional cases, in which case it is a matter that will be properly brought before that Committee.

Lieut.-Colonel ASHLEY: If the Chief Chief Secretary can give superannuation allowances to the Royal Irish Constabulary, why cannot the War Office do the same for these discharged men who are equally in danger of their lives by returning home?

Sir L. WORTHINGTON EVANS: Quite a considerable number of grants are made to these men under the Army Order to which I have referred, and if my hon. Friend does not think it sufficient perhaps he will communicate with me in reference to the cases which he has in mind.

Sir J. BUTCHER: What financial provision is made by the Army Order in the case of men who are disbanded, and are unable to return home owing to being threatened with death?

Sir L. WORTHINGTON-EVANS: I do not know whether the hon. Baronet has seen the Army Order; if not, I shall be glad to send him a copy.

FREE STATE CONSTITUTION.

Lieut.-Colonel Sir S. HOARE: 26.
asked the Prime Minister whether the General Election shortly to be held in Ireland will be held in accordance with the understanding that the constitution of the Treaty will be submitted by the Provisional Government to the Irish people; if so, whether His Majesty's Government has approved the draft of the Irish Constitution; and when, and in what way, will the terms of the Constitution be made public?

Sir W. DAVISON: 27.
asked the Prime Minister whether, in the agreement which has been entered into between Mr. Griffith and Mr. Collins, as representing the Provisional Government of Southern Ireland, on the one hand and Mr. De Valera on the other for an agreed election in Southern Ireland with agreed candidates, any provision has been made whereby approved candidates shall have expressed their agreement with the terms of the Treaty entered into with the British Government and subsequently ratified by Parliament; and whether all such candidates will be required to take the oath provided for in the said Treaty before they take their seats?

Colonel NEWMAN: 32.
asked the Prime Minister whether, having regard to the method by which the status of a Dominion was conferred by the Imperial Parliament on Canada, Australia, and South Africa, he will say if the Constitution of the Irish Free State giving the Free State the same constitutional status as the Dominion of Canada has been submitted to the Government; if so, whether, in addition, what is known as Document No. 2, which is an alternative Constitution for Ireland and which places Ireland in the same position as the Republic of Cuba, has also been submitted and when will this House be placed in possession of these two documents?

The SECRETARY of STATE for the COLONIES (Mr. Churchill): I had hoped to be able to make a general statement on the Irish situation at the close of Questions to-day, but in view of the position of the discussions which are now
proceeding with the Irish representatives, it will be in the public interest to defer this statement till to-morrow or Wednesday. It is possible, and even probable that the discussions will not have concluded by to morrow, but in view of the gravity and urgency of the issues already disclosed, Parliament is entitled to the fullest information available in order that the House may, if it pleases, debate the subject before the Whitsuntide Adjournment.

Sir S. HOARE: If the statement is not made to-morrow, and the House adjourns to-morrow, how will the House have an opportunity of debating the question?

Mr. CHAMBERLAIN: I will answer that: I do not propose to attempt to adjourn to-morrow. We will take the Motion for Adjournment on Wednesday. I will probably be asked about Business at the close of Questions, and I will make a statement then.

Sir W. DAVISON: Will the right hon. Gentleman, at any rate, assure the House that, so far as the British Government is concerned, they will insist that all the Members returned to the new Irish Parliament shall take the oath of allegiance prescribed in the Treaty? Can we have that assurance?

Mr. CHURCHILL: I think I had much better make my statement as I have said.

Sir W. DAVISON: Surely that is a simple question. [HON. MEMBERS: "Hear, hear!" and "No, no!"] Cannot we have an answer whether the British Government intend to stick to the Treaty or not?

Mr. CHURCHILL: I should have no difficulty in answering the question of my hon. and gallant Friend, but I think it much better that I should make my statement later.

Lieut.-Colonel ASHLEY: On a point of Order. After the statement of the right hon. Gentleman, can we have any assurance from you, Sir, that if a large number of Members wish to raise the question on the Adjournment it shall have priority to other questions?

Mr. SPEAKER: I take a serious view of the question, and will give it a foremost place.

Colonel WEDGWOOD: Has not the first place in the discussion upon the Adjournment been already pledged for the Reparation question and our relations with France?

Mr. SPEAKER: I shall have to consider that. I cannot say at the moment.

REFUGEES (ASSISTANCE).

Colonel NEWMAN: 36.
asked the Prime Minister whether, as was done in the case of the Belgian refugees in the European War, Government assistance can be made available for organisation of relief and finding temporary employment for the loyalist refugees from the South of Ireland?

The UNDER-SECRETARY of STATE for the COLONIES (Mr. Edward Wood): I would refer the hon. and gallant Member to my right hon. Friend the Chief Secretary's reply to a Private Notice question on 18th May last announcing the setting up of a Committee under the chairmanship of the hon. and gallant Member for Chelsea to deal with refugees from Ireland. With regard to the last part of the question, applicants for employment, should register at the local Employment Exchanges.

Colonel NEWMAN: Does the hon. and gallant Member really think that £10,000 is sufficient and is he aware that my question asks what is going to be done with regard to the organisation of relief for these refugees? Surely £10,000 does not cover that.

Mr. WOOD: I must ask for notice.

Colonel NEWMAN: It is information asked for in the question.

TROOPS, DUBLIN

Colonel GRETTON: (by Private Notice) asked the Secretary of State for War if it is the intention of His Majesty's Government to withdraw all troops from Dublin; and if any orders have been issued?

Mr. CHURCHILL: There is no such intention at the present time.

Colonel GRETTON: Can the right hon. Gentleman give us an assurance that the troops remaining in Ireland will be allowed to carry such arms as are necessary for their protection in that country.

Mr. CHURCHILL: That is a question which should be addressed to the War Office. I cannot conceive that they will not be allowed.

Colonel GRETTON: Is the right hon. Gentleman aware that the troops now go out without side arms, even the military police?

LONDONDERRY (SINN FEIN TROOPS).

Major BOYD-CARPENTER: (by Private Notice) asked the Secretary of State for the Colonies if he has any information of the alleged massing of Sinn Fein forces and many motor vehicles on the Donegal border of Londonderry, and if His Majesty's Government are taking any precautions to protect the city of Londonderry?

Mr. CHURCHILL: I have no information beyond what I have seen in the newspapers, but the Government of Northern Ireland and the Military Commander on the spot may be trusted to take whatever measures are necessary.

Mr. RONALD McNEILL: Do "any measures that are necessary" include taking measures against these forces which are gathering on the Free State side of the boundary, and will any impediment be placed by His Majesty's Government against such action?

Mr. CHURCHILL: Yes, the crossing by our forces of the boundary of the six counties would have to be a matter which, in the first instance, must be considered by the Cabinet.

Lieut.-Colonel ASHLEY: Has the Commander-in-Chief in the North of Ireland been instructed to give all support to the Prime Minister of Northern Ireland when he asks for it, without referring to England?

Mr. CHURCHILL: Yes, certainly; but that does not apply to an invasion of territory external to the six counties.

Captain CRAIG: As the crossing of the border between Northern and Southern Ireland by the Free State troops, or the Irish Republican troops, or whoever are massing at the present time, is very likely to take place, may I ask whether the Cabinet have taken this matter into consideration?

Mr. CHURCHILL: I do not think I can give accounts of subjects which the Cabinet have taken into consideration.

Mr. R. McNEILL: If the account which the right hon. Gentleman has seen in the newspapers be true, and there is a large massing of hostile troops within half-an-hour's run of Derry City, and if the military in these circumstances think that the best way of dealing with it would be to take the offensive against these troops, will it be necessary to have a Cabinet decision upon the matter before that can be done, or may Derry City be invaded and sacked possibly within half-an-hour?

Mr. CHURCHILL: It certainly would be a very grave decision requiring the mature deliberation of His Majesty's Government before an act of aggression outside the territory of the six counties could he taken, even if such measure was necessitated as a measure of self-defence.

Mr. McNEILL: As that position may arise at any moment, will the right hon. Gentleman undertake that the matter shall be immediately considered by the Cabinet in case of necessity?

Sir J. BUTCHER: Will the right hon. Gentleman ask leave of the Provisional Government that British troops should go to disperse the rebels who are massing against Ulster?

Lieut.-Colonel ARCHER-SHEE: Will the right hon. Gentleman make representations to Mr. Collins and the other Irish leaders over here, now that they are met together here, that they should withdraw these troops and prevent the threatened situation arising?

Mr. CHURCHILL: I shall certainly see that these matters are brought to the notice of the Irish Ministers over here, and find out what they have to say.

Captain CRAIG: Are we to understand that such important matters as these have not yet been dealt with by the right hon. Gentleman in conversation with Mr. Collins and his colleagues?

Mr. CHURCHILL: I am not prepared to say what portions of the serious and difficult situation in Ireland have yet been discussed or not discussed between the British Government and the representatives of the Irish Government. So far as the situation in Londonderry is concerned, I received last week a request from the Prime Minister of Northern Ireland to procure a naval force in the shape of a
destroyer and other naval vessels. I communicated with the First Lord of the Admiralty, and almost immediately the vessels left, and are in position there. The actual position there is being carefully studied by the military authorities, the War Office and the Admiralty. We take full responsibility for giving protection to Ulster.

Sir W. DAVISON: Is the right hon. Gentleman satisfied that the military forces in and around Derry are sufficient to meet any calls for assistance that may be made by the Prime Minister of Northern Ireland?

Mr. CHURCHILL: There are 19 battalions in Northern Ireland, and the Prime Minister of Northern Ireland is in constant touch with General Cameron, who is commanding there, an able officer, who has full discretion to take any measures which are necessary, and if more forces are necessary, infantry, cavalry and artillery, they will be sent.

Mr. GWYNNE: Do I understand that General Cameron has full power on the request of the Government of Northern Ireland to do anything that is necessary for protecting life and property.

Mr. CHURCHILL: Certainly; he has full power to work in conjunction with the Prime Minister and Government of Northern Ireland, and to act when they require him.

ATTACKS ON POLICE, ULSTER.

Captain CRAIG: Has the right hon. Gentleman any information to give to the House with regard to the position in Belfast and Ulster?

Mr. CHURCHILL: I have just received the following telegram from the Prime Minister of Northern Ireland (Sir James Craig):
It is now confirmed that the police attacked near Bellek. Have one man killed and lost two Crossley tenders and one Lancia car. The driver of the first car was killed at the wheel, and his car swerved into the ditch, with the result that the other two cars could not get past and were exposed to intense rifle fire. All three cars had therefore to be abandoned. The Cullingtree Road Police Barracks, Belfast. was attacked at noon to-day by strong body of Sinn Fein gunmen, who poured a heavy fire into building. Three police were severely wounded, one feared mortally. The attack was ultimately beaten off.

INTERNATIONAL LOANS AND CREDITS.

Mr. MALONE: 34.
asked the Prime Minister whether the Bank of England has yet called a meeting of the central banks and banks regulating credit policy in the several countries, as recommended by the Finance Commission of the Genoa Conference; and whether there is any possibility that America will cooperate in the bankers' meeting?

Mr. YOUNG: I am unable at present to add anything to the answer given on the 25th instant to my hon. Friend the Member for Lincoln.

Mr. MALONE: 35.
asked the Prime Minister whether there is any machinery for communicating the general Resolutions regarding the, granting of loans and credits agreed to by the Finance Commission of the Genoa Conference to the Reparation Commission's committee of bankers, at present sitting in Paris, to consider the question of the granting of a loan to Germany?

Mr. YOUNG: Yes, Sir.

GERMANY AND RUSSIA.

Viscount CURZON: 38.
asked the Prime Minister whether the Government have any reason to believe that a military agreement has been reached between the German and Soviet Governments?

Lieut.-Colonel Sir F. HALL: 50.
asked the Lord Privy Seal whether the Allied Governments propose to institute an investigation into the question of a secret war agreement between Germany and Russia, and to take such practical steps as will make it impossible for the German and Russian Governments to co-operate on these lines?

The PRIME MINISTER: Inquiries have been made as to the authenticity of the reports of a secret war agreement, but no confirmation has been obtained. The matter will not be lost sight of.

Lieut. Commander KENWORTHY: Did not the Prime Minister state in his speech on Thursday that this was a forgery, and that the whole thing was acanord?

The PRIME MINISTER: I was referring to a document published in the newspapers.

Mr. W. THORNE: Has the right hon. Gentleman any reason to believe that there is a military pact between Russia and Germany?

Lieut.-Colonel J. WARD: Of course there is!

RESEARCH WORK (ADMIRALTY AND AIR MINISTRY).

Sir H. BRITTAIN: 41.
asked the Prime Minister what amount has been spent on research by the Admiralty during the last 12 months, as compared with that spent by the Air Ministry; and what sum each of these Departments will have available for the same purpose during the ensuing 12 months?

Mr. YOUNG: This information is being obtained and will be sent to my hon. Friend as soon as it is available.

Dr. MURRAY: Is it not a fact that these Departments are still hampered in their work by the operation of the Safeguarding of Industries Act?

PALESTINE (MANDATE).

Mr. ORMSBY-GORE: 42.
asked the Prime Minister whether he will lay a Paper, giving a full and correct report of the speech of the Lord President of the Council at Geneva on 17th May on the subject of the Palestine Mandate, or arrange for such a report to be placed in the Library, in view of the important bearing that this speech may have on the future of the mandatory system?

The PRIME MINISTER: Yes, Sir; I will arrange for a, copy to be placed in the Library.

HONG KONG (LIEUT.-COMMANDER HASLEWOOD).

Mr. INSKIP: 44.
asked the Lord Privy Seal whether he is aware that the Governor of Hong Kong requested the Naval Authorities at Hong Kong to restrain the wife of Lieut.-Commander Haslewood, then superintendent of the chart department, from advocating publicly the prohibition of the mui tsai system, and that the Commander-in-Chief thereupon tried to bring pressure to bear upon Mrs. Haslewood, through
her husband, to desist from her public advocacy of a Measure which has now been substantially adopted by His Majesty's Government, as evidenced by the proclamation in Hong Kong that slavery is not allowed to exist in the British Empire and that, therefore, the mui tsai are not the property of their owners: and whether, in view of all the circumstances, the Government can make some amends both to Lieut.-Commander Haslewood and to Mrs. Haslewood.

Mr. CHAMBERLAIN: I had better first state the facts as far as I have been able to ascertain them. According to the Governor's report, his attention was drawn to the fact that Mrs. Haslewood was at that time conducting her campaign, which included allegations of widespread cruelty to mui tsai, in terms which gave much annoyance to the Chinese community. The Chinese have a great regard for official position, and when an officer's wife, with the encouragement of her husband, made attacks of this character, the Governor considered that there was a danger that they might get the impression that the Government approved the terms which were employed, and that thus a state of ill-feeling towards the British Government would be created which would be highly undesirable, especially in view of the unsettled state of South China. A Governor is both entitled and bound to do all he can to restrain persons from acting in a manner likely to disturb the peace of the colony for which he is responsible. In these circumstances the Governor had decided to ask the Secretary of State for the Colonies to request the Admiralty to move Lieut.-Commander Haslewood to another station, but on further consideration, not wishing to damage Lieut.-Commander Haslewood's professional prospects, he communicated privately with the Commodore on the subject, suggesting that he should ask Lieut.-Commander Haslewood to restrain his wife from taking part in a public controversy affecting racial questions and customs and stirring strong and dangerous feeling in the Chinese community.
The Commodore, and subsequently the Commander-in-Chief, interviewed Lieut.-Commander Haslewood, and the Commander-in-Chief informed him that if he wished to continue his campaign he ought
to resign his official appointment in the Dockyard. In the meantime, Mrs. Haslewood was taken to hospital, and her condition was such that the doctors had the gravest doubts as to her recovery if she did not leave the Colony at once. The Commander-in-Chief accordingly informed Lieut.-Commander Haslewood that he was prepared to allow him to proceed home with his wife and to replace him in the Chart Office by another officer. Lieut.-Commander Haslewood accepted this offer, and on returning home gave as his reason for leaving the Chart Depot: "I applied to proceed on urgent private affairs. This was approved by the Commander-in-Chief, China Station."
Lieut.-Commander Haslewood was a retired officer who had volunteered for service during the War. About the time of his leaving Hong Kong, the War being over, the Admiralty were reverting such officers to the retired list, and they were being warned in advance of the likelihood of their being relieved at an early date by active service officers as opportunity offered. object of this warning was to give these officers as much notice as possible of the impending change. Lieut.-Commander Haslewood knew that this was the Admiralty policy at the time. though it is doubtful if the warning reached him before he left Hong Kong. It will be seen that the naval authorities acted at the request of the Governor, and the Governor seems to have shown all possible consideration in the performance of what he felt to be his duty to the Colony. Lieut.-Commander Haslewood suffered no injury to his professional career, and the Admiralty did not at any time express displeasure at his conduct.
I wish to make it quite clear that there has not at any time been any suggestion that Lieut.-Commander Haslewood and Mrs. Haslewood acted from any but the highest motives.

Sir J. D. REES: Is not the Proclamation of the Governor a spirited negation of self-determination, seeing that the British are a mere handful among half a million of Chinese?

ASIA MINOR (ATROCITIES).

Sir.J. D. REES: 45.
asked the Lord Privy Seal whether he is aware that the an-
nouncement of the intention to appoint a committee of investigation into charges of cruelty towards their Greek subjects brought against the Turks has been received by Indian Mahommedans with doubts whether such investigation will deal impartially with the many charges of cruelty to Turks brought against the Greeks during their occupation of Turkish territory in Asia Minor, and by the Angora Government with doubts whether any but neutrals should deal with Charges brought against belligerents of cruelties perpetrated by one upon another of the nations at war; and whether these facts will be taken fully into account by His Majesty's Government in carrying out its expressed intention to bring about a formal investigation into atrocities in Asia Minor?

Mr. HARMSWORTH: His Majesty's Government have no information on the subject of the alleged doubts referred to by the hon. Member. Whatever doubts may or may not be felt by Mahommedans in India and Asia Minor, the hon. Gentlemen himself must be well aware that the Government have not, and cannot have, any other object in furthering an investigation then that of arriving at the truth.

Sir J. D. REES: Is it not the case that these charges come from the very sources in which the Turks allege plots and rebellions are hatched against them?

Mr. HARMSWORTH: I shall be glad if my hon. Friend will put that question down on the Paper.

CANADIAN CATTLE EMBARGO.

Mr. W. SHAW: 48.
asked the Lord Privy Seal if he can now announce the date fixed for the discussion of the Canadian cattle embargo question.

Mr. CHAMBERLAIN: No, Sir. I shall not be able to name a date for this discussion till after the Recess.

Mr. SHAW: Has the right hon. Gentleman forgotten that in the first instance he said he hoped to give us a day shortly after Easter? Now it is to be after Whitsuntide?

Mr. CHAMBERLAIN: I do not think I promised a day "shortly after Easter." What I think I said was that I could
not make any statement as to a date until after Easter. I make the same statement now with regard to Whitsuntide.

Lieut.-Commander KENWORTHY: Will it be before the General Election?

CZECHO-SLOVAKIA (COMMERCIAL TREATY).

Mr. KILEY: 57.
asked the President of the Board of Trade whether his Department have offered certain objections, on account of the Safeguarding of Industries Act, to a commercial treaty or understanding with Czecho-Slovakia which would give favoured treatment to goods imported from Great Britain.

Mr. BALDWIN: I should be very glad to see the negotiations for a commercial agreement with Czecho-Slovakia reach a successful issue, but the existence of the Safeguarding of Industries Act is obviously one of the factors which have to be taken into account.

Captain W. BENN: Has the right hon. Gentleman's attention been called to the proceedings of the Conference at Genoa, and the statement of the Prime Minister that the chariot would be driven to the goal. Why, therefore, should we be the people to interfere with Free Trade among the countries of Europe?

Mr. BALDWIN: I shall be glad if my hon. Friend will send me the marked passages of the speech to which he refers.

Mr. KILEY: Will the President of the Board of Trade bear in mind the limited results achieved by this Act when considering the advantages that will accrue to the population of this country by making this treaty?

Mr. BALDWIN: I will bear that in mind.

MERCANTILE MARINE (LOSSES BY ENEMY ACTION).

Sir ARTHUR FELL: 61.
asked the President of the Board of Trade the number of merchant ships of this country which were lost during the War by enemy action and the value of such ships and the value of their cargoes; how much was paid by the Government to the owners of such ships and cargoes; and if any statement on the subject is available?

Mr. BALDWIN: The number of British merchant ships lost by enemy action up to the date of the Armistice is 2,479, as stated in the return of British vessels lost or captured by the enemy. (House of Commons Paper No. 199 of 1919.) It is not possible to give a complete statement of the total value of the ships and their cargoes, but in regard to such ships and cargo as were insured under the various Government Schemes, the following figures are given in the preliminary statement of results of the Government War Insurance Schemes (Cmd. 98). Total amount paid in respect of ships, approximately, £64,206,000, and of cargoes, approximately, £68,281,000. In addition, the sum of £98,790,000 was paid in respect of total losses of requisitioned ships. Final figures of losses cannot be given till the accounts are closed.

Sir A. FELL: Would it not be of the greatest advantage to have some statement got out on this subject, so as to assist speakers who are discussing the losses of this country?

Mr. GRITTEN: How much was paid by the Government to the legal representatives of those who lost their lives in these ships owing to enemy action?

Mr. BALDWIN: I must have notice of that question.

GENOA CONFERENCE.

Lieut.-Commander KENWORTHY: 62.
asked the President of the Board of Trade if he will state what steps His Majesty's Government intend to take to carry out the recommendations of the Third Commission (Economic) at the Genoa Conference affecting the freedom of international trade?

Mr. BALDWIN: His Majesty's Government are in full accord with the recommendations of the Commission, and are considering what steps may be necessary to give effect to them so far as the United Kingdom is concerned.

Lieut. Commander KENWORTHY: Has the right hon. Gentleman noted, on page 72 of the Blue Book, the special stricture on the licensing system, and will he reconsider the Dyes Act in view of that?

Mr. BALDWIN: I hope the hon. and gallant Member will use that influence to get the tariffs of foreign countries reduced.

Captain W. BENN: Among other Measures which the Government are considering in connection with this Report, are they considering the possible necessity of modifying the Safeguarding of Industries Act?

Mr. BALDWIN: That has nothing whatever to do with it.

Lieut. Commander KENWORTHY: Are we, then, to wait for other countries? If everyone waits for other countries, will anything ever be done?

BRITISH DYESTUFFS CORPORATION.

Mr. ORMSBY-GORE: 64.
asked the President of the Board of Trade why Mr. Levinstein has resigned from the management of the British Dyestuffs Corporation; whether dissatisfaction has been expressed regarding the composition of the directorate of the concern; and, seeing the large sum of the taxpayers' money that is invested in this concern, he will appoint a Select Committee of the House of Commons to investigate the conduct of the concern in order that a report thereon may be made to Parliament?

Mr. BALDWIN: I am not at present aware of the precise causes of the resignation to which the question relates, but that matter and any criticisms of the directorate are primarily questions for the consideration of the shareholders in the Corporation, in which the Government interest is only a subordinate one. I am not prepared to take the course suggested in the last part of the question.

Mr. ORMSBY-GORE: Are we to understand that the British taxpayers have no right to be represented as shareholders?

Mr. BALDWIN: Certainly, they have a right.

Mr. INSKIP: Who represents the Government at the shareholders' meetings?

Mr. BALDWIN: There are two Government directors of the company.

Captain W. BENN: Is not the House of Commons the proper place for the taxpayers' representatives to discuss the disposition of the taxpayers' money in investments?

Mr. BALDWIN: There are opportunities for discussing the activities of this Corporation on the appropriate Estimates.

Major MACKENZIE WOOD: Has the right hon. Gentleman consulted the Government representatives as to what has happened?

Mr. ORMSBY-GORE: How can we be satisfied that the work of the Government directors on the Board of this very important company is satisfactory?

Lieut. Commander KENWORTHY: While expressing great sympathy with the right hon. Gentleman, may I ask whether he cannot answer some of our questions?

Oral Answers to Questions — EDUCATION.

PHYSICAL TRAINING, COLCHESTER.

Mr. HURD: 71.
asked the President of the Board of Education whether his attention has been called to the report of Mrs. Alderton, a magistrate of Colchester, as made to the Women's National Liberal Federation, upon her visit to a school in that place during a physical drill class; whether the headmaster was present to overlook the work of the physical instructor, together with the borough inspector of physical training, the lady inspector, the general inspector for the Eastern Counties, and the chief inspector of physical training for England, each intent upon seeing that his subordinate carried out his duties, and all combined receiving salaries estimated at £4,000; and what measures he proposes to secure further economies in the system of school inspection?

The PRESIDENT of the BOARD of EDUCATION (Mr. Herbert Fisher): I have seen the Report in question. The facts are as follows: On 2nd February, 1922, three officers of the Board were present, by arrangement, in Colchester to confer upon the suitability of a new permanent local official whom the Local Education Authority wished to have recognised by the Board as their
Organiser of Physical Training, an important post connected with all the schools in the borough. The suitability of the officer concerned could obviously best be ascertained by seeing him at work in the schools, where the teachers concerned were, naturally, present also. None of the persons present, therefore, were present for the object stated by Mrs. Alderton, nor was the occasion one of ordinary school inspection at all. In view of the importance of securing that the persons appointed to these new posts are really competent, I do not think that excessive care was given to the case by the Board's officers concerned.

Mr. HURD: Could the right hon. Gentleman answer the second part of the question, as to what measures he proposes to take?

Mr. FISHER: I do not think that any reduction in the number of inspectors would be immediately effective of economy. On the contrary, the making of inspections is one of our most important instruments for effecting economy.

ISLEWORTH COUNTY SCHOOL (MR. H. MOORE).

Mr. GIDEON MURRAY: 72.
asked the President of the Board of Education whether he has completed his inquiry into the case of Mr. H. Moore, the county school teacher of Isleworth; and, if so, with what result?

Mr. FISHER: As I promised in my answer to the hon. Member's question last Monday, I have communicated with the local education authority, but I have not yet heard from them.

BULGARIAN PRISONERS.

Mr. AUBREY HERBERT: 81.
asked the Under-Secretary of State for Foreign Affairs whether any Bulgarian prisoners are still in the hands of the Greeks; and, if so, how many, and where?

Mr. HARMSWORTH: There are to the best of my information no Bulgarian prisoners in Greek territory.

PASSPORTS AND VISAS.

Sir H. BRITTAIN: 82.
asked the Under-Secretary of State for Foreign
Affairs what other countries, in addition to Great Britain, are now carrying out the suggestions put forward at the Genoa Conference for the simplification of the visa for the benefit of travellers?

Mr. HARMSWORTH: A number of European countries have adopted parts of the Resolutions of the Paris Conference of October, 1920, which formed the basis of the suggestions put forward at the Genoa Conference; and at a Conference held at Gratz in January last an agreement was signed between Italy, Austria, Hungary, Poland, Rumania, the Kingdom of the Serbs, Croats and Slovenes and Czecho-Slovakia accepting these Resolutions. So far, however, as His Majesty's Government are aware, the only foreign Governments at present giving effect to the Resolutions in their entirety are those of Austria and Belgium.

FOOT-AND-MOUTH DISEASE.

Mr. BETTERTON: 85.
asked the Minister of Agriculture the total number of animals slaughtered since the present outbreak of foot-and-mouth disease; and what proportion they bear to the total of the herds of the country?

The MINISTER of AGRICULTURE (Sir Arthur Boscawen): The total numbers of animals slaughtered from the 23rd January to the 26th May, 1922, inclusive, are as follow:


Cattle
…
…
…
23,125


Sheep
…
…
…
20,908


Pigs
…
…
…
9,395


Goats
…
…
…
47


These figures, expressed as percentages of the total herds in Great Britain, are as follow:







Per cent.


Cattle
…
…
…
…
0.35


Sheep
…
…
…
…
0.12


Pigs
…
…
…
…
0.35


I have not worked out the percentage of goats.

Mr. CAIRNS: To what part of the country do these particulars refer?

Sir A. BOSCAWEN: They are for the whole of Great Britain.

COAL (PRICES).

Sir ROBERT CLOUGH: 67 and 68.
asked the Secretary for Mines (1) whether, in view of his statement that it is important that the House should realise that there are many other factors in the cost of household coal besides the wages of the miners and the profits of the owners, such as the cost of carriage, railway rates, and the cost of distribution, he will give some idea of the percentage of cost which must be added in respect of each contributory factor to the pithead price of cottage coal sold, for instance, 50 miles from the colliery producing it;
(2) whether, seeing that the high price of cottage coal diminishes its consumption, and that it would benefit the miners to increase consumption by efforts to ascertain and remove the causes of the high prices, which, according to authentic statements, are not due to the colliery owners or workers, an inquiry could be instituted to ascertain information as to these causes, if it is not at present available?

The SECRETARY for MINES (Mr. Bridgeman): I have consulted the Coal Merchants' Federation of Great Britain on the subject. They have supplied me with a detailed analysis of the retail prices of three different grades of household coal sold in London. They have readily agreed to the publication of this statement, and I will circulate it in the OFFICIAL REPORT. They are supplying information for certain provincial centres, which I will publish as soon as they have completed it. In the meantime I may give the following figures respecting cheap coal sold at Cheltenham, where the conditions appear to correspond to those postulated in the question:—



s.
d.


Pit price
20
0


Railway rate
9
2


Wagon hire
2
0


Distribution charges, including factorage
7
11


Retailers' profit.
0
11


Retail price
40
0

Following is the statement:

RETAIL COAL PRICES PER TON ON 25TH MAY, 1922.


In Central London.


Items of cost.
Best Coal.
Derby Brights.
Kitchen Nuts.



s.
d.
s.
d.
s.
d.


Pit price
38
8
26
6
21
0


Railway rate
10
8
9
10
8
9


Wagon hire
2
0
2
0
2
0


Wages of loaders and carmen (including picking out slates, screening, tareing sacks, foreman's fee, landing coal to heaps, etc., driving money, attendance at stables, long journeys, etc.).
3
11
3
11
3
11


Cartage expenses (vans, trolleys, weighing machines, horse depreciation, forage, shoeing, veterinary attendance, harness and stable expenses, stable rent).
2
10
2
10
2
10


Sacks

4

4

4


Loss on small coal, etc.

9

9

9


Siding rent, weighbridge charges, wharf rent, demurrage, etc.

4

4

4


Clerical salaries
2
2
2
2
2
2


Establishments charges (stationery, telephones, rents, postages, light, water, travelling, advertising', bad debts, discounts and allowances, National Health and other insurance).
1
11
1
11
1
11


Balance—profit

5

5

6


Total—Retail price
64
0
51
0
44
6

Oral Answers to Questions — TRANSPORT.

ARTERIAL ROADS.

Colonel NEWMAN: 73.
asked the Parliamentary Secretary to the Ministry of Transport whether he has any figures as to the cost involved to the ratepayers and taxpayers in the construction of the present new arterial roads; whether he is aware that an official of the Ministry has estimated the cost at £100,000 per mile as against a total capital expenditure of £56,000 per mile in the construction of a railroad; and whether, even allowing for the fact of inefficient and costly unemployed labour, he is satisfied that public money is not being wasted on the construction of these roads?

The PARLIAMENTARY SECRETARY to the MINISTRY of TRANSPORT (Mr. Neal): As the answer is a lengthy one and contains numerous figures, I will, with my hon. and gallant Friend's permission, circulate it in the OFFICIAL REPORT.
The answer is as follows:
The arterial road schemes which have recently been put in hand in the metropolitan area are shown in Schedule I below, together with an estimate of the cost of each work. These metropolitan schemes involve a total estimated expenditure of £6,000,485, which will eventually be met approximately as follows:



£


By the Road Fund
2,946,834


By Special Exchequer Contributions
1,085,930


By Contributions from Local Authorities
1,967,721


It is impossible to give any estimate of the aggregate cost of road schemes, of a character which might be termed arterial, which have been initiated by highway authorities in the provinces. Grants amounting to £3,699,898 have been indicated during the past eighteen months towards important provincial road schemes expedited for the relief of unemployment. The expenditure on the part of local authorities is represented by an approximately equal amount. Many of the schemes, however, are widenings or improvements, or have reference to roads which are not of an

SCHEDULE I.


ARTERIAL ROAD WORKS IN THE METROPOLITAN AREA.


(a)Schemes for the execution of which the Ministry of Transport is directly responsible.


Road.
Length in miles.
Estimated Cost.


New Construction.
Widening.





£


Eastern Avenue
9.0
—
357,500


East Ham and Barking By.pass Road
3.0
—
260,000


Woodford—Ilford Road
1.75
—
100,000


London—Southend Road
21.0
—
735,000


London—Tilbury Road, including Rainham and Purfleet By.pass Roads.
3.5
5
427,000


London—Dover Road—





(a) Dartford—Gravesend Section
—
3.75
125,000


(b) Gravesend—Strood Section
.68
4.5
125,000


Watling Street between Dartford and Strood
11.2
—
525,000


London—Folkestone Road—





(a) Sidcup—Farningham Section—including By.pass Road at
Farningham.
1.06
5.0
107,500


(b) Farningham—Wrotham Section— including By.pass Road at Wrotham.
1.78
5.34
99,000


Dartford—Erith Road
1.45
.23
70,000


Dartford By.pass (Millpond Road)
Total length 1.15 miles.
34,500



Scheme still under consideration.



Kingsdown—Longfield
Total length 4.7 miles.
79,000



Scheme still under consideration.

arterial character. Some of the more important provincial schemes are shown in Schedule II below.

It will be seen from the Schedules referred to that there are necessarily wide variations in the cost per mile of new construction, owing to differences in the dimensions adopted, in the engineering difficulties to be overcome, in the scope of the specification, and in the compensation payable for the acquisition of property. The general average, however, falls very far below the figure of £100,000 per mile quoted by my hon. and gallant Friend, which appears to have been deduced by a newspaper from the estimated figures applicable to an exceptional case. The works in question will be of great public utility and are providing a means of absorbing a considerable amount of unemployed labour. I am satisfied that the public money spent on them is not being wasted.

(b)Schemes for the, execution of which highway authorities are responsible.


Road.
Length in miles.
Estimated Cost.


New Construction.
Widening.





£


Great West Road
5.0
—
931,586


Great West Road extension
3.0
—
146,000


Croydon By.pass Road
2.25
1.5
187,250


Western Avenue Sections in L.C.C. and Middlesex Areas.
2.0
—
50,000


Sudbury Spur
—
.33
15,000


Eltham By.pass Road—Sections in L.C.C. and Kent areas and including the Kidbrook Park extension.
3.5

253,049


New Cambridge Road—Sections in Middlesex and Herts.
10.37
—
509,000


New Chertsey Road—Sections in Chiswick U.D.
.5
—
59,000


North Circular Road—Sections in Middlesex and Essex.
6.5
.3
612,000


Shooter's Hill By.pass Road—Sections in L.C.C. and Kent areas.
3.0
—
168,100


South Circular Road
.66
—
25,000

SCHEDULE II.


SOME OF THE MORE IMPORTANT ARTERIAL ROAD WORKS IN THE
PROVINCES.


Local Authority.
Road.
Length in miles.
Estimated Cost.


New Construction.
Widening.






£


Durham County Council
Easington—W. Hartlepool
8.21
—
271,000


Flints County Council
Rhyl—Gronant
4.02
—
36,000


Lancashire County Council
Liverpool—Ormskirk
1.21
—
69,042


Eston Urban District Council
Grangetown—Redcar
1.36
—
27,710


Redcar Urban District Council
Redcar—Estor
3
—
51,557


Dundee Town Council
Ring Road (portion)
1.375
—
58,000


Leeds City Council
Ring Road (portions)
2.5
—
101,591


Liverpool City
Allterton Road—Heath Road
2.55
—
141,750


Heath Road—Woolton Road


Portsmouth County Borough Council.
Paulsgrove Road
1
—
43,000


Sheffield City Council
—
1.88
—
73,721


Southport County Borough Council.
Liverpool Road to Waterloo Road.
1.25
—
78,112


East Sussex County Council
Brighton—London Road
—
6
99,271


Lancashire County Council
Liverpool—Prescot
—
3.06
174,426


Glasgow City Council
Maryhill Road
—
.72
60,000


Nottingham County Borough council.
Hucknall Road (1st Section)
—
0.45
26,400



Hucknall Road (2nd Section)
—
1.03
52,000

CHAR-À-BANC TRAFFIC, ESSEX.

Captain MARTIN: 76.
asked the Parliamentary Secretary to the Ministry of Transport if his attention has been called
to the inquiry now being held at the Shire Hall, Chelmsford, with a view to the closing of a number of Essex County Council roads to char-à-bane traffic; is he
aware that if this traffic is forbidden it will cause hardship and loss to many classes of persons; and will he, before consenting to the closing of these roads, consider the alternative of advising the Essex County Council to widen these roads and remove dangerous corners, thus creating useful work for the unemployed as well as removing any hindrance to this traffic?

Mr. NEAL: The inquiry referred to is a public inquiry under Section 7 (4) of the Roads Act, 1920. It has been fully advertised in accordance with the provisions of the Act, and all interested parties have had an opportunity of presenting their views to the Divisional Road Engineer who is holding it. Before a decision is reached on his Report, the points mentioned by my hon. and gallant Friend, and any other relevant considerations, will be taken into account.

MOTOR VEHICLE LICENCES (ISSUE).

Major GLYN: 77.
asked the Parliamentary Secretary to the Ministry of Transport on what basis has the Ministry estimated the sums it considers right and proper to be paid by local authorities to certain officers in their employment, part of whose duties are to administer Acts of Parliament concerned with matters controlled by the Ministry of Transport; and upon whose authority at the Ministry of Transport was the clerk of a county authority in Scotland recently informed that a salary of £200 per annum should be paid to the official whose duty it is to issue an average of 630 road-vehicle licences?

Mr. NEAL: The Minister of Transport does not lay down what salaries are to be paid by local authorities. In the case apparently referred to in the second part of the question, exception was taken by the Ministry of Transport to the amount claimed by a local authority for expenses of collection of licence duties, and, in response to a request, the clerk was informed that a charge of £200 to cover all expenses for supervisory indoor and outdoor staff, equipment and accommodation (including lighting and firing) would be agreed to.

LIGHT RAILWAYS.

Sir R. NEWMAN: 78.
asked the Parliamentary Secretary to the Ministry of
Transport what work has been undertaken respecting light railways by the Ministry; and whether he can state the number of men who have received employment in consequence of the work then undertaken?

Mr. NEAL: Arrangements have been completed whereby the Government will, subject to the fulfilment of certain conditions, contribute a limited sum not exceeding 50 per cent. of the cost of constructing a light railway between Torrington and Halwill in Devonshire and also 50 per cent. of the cost of completing a light railway from Portmadoc to Dinas in North Wales. Work on the Portmadoc-Dinas railway commenced on the 8th instant and the number of men employed at present is 34; this number, I understand from the promoters, will be increased to 500 to 600. As regards the Torrington-Halwill scheme, I am infomed that work will be begun this week and I am advised will ultimately find work for 800 to 900 men.

UNEMPLOYMENT RELIEF WORKS (LAND DRAINAGE).

Mr. WIGNALL: 87.
asked the Minister of Agriculture if he is aware that an order has been issued to stop the relief work on the land drainage scheme in the Forest of Dean, Gloucestershire, on the 31st of this month, which will cause a large number of men to be unemployed; that a resolution from the Gloucester County Council has been sent urging the Government to continue this important and useful work; and that all the men employed on this work are ex-service men or unemployed miners, all of whom have proved themselves thoroughly efficient in carrying out the work; and will he look into this matter?

Sir ASHTON LISTER: 91.
asked the Minister of Agriculture whether he is aware that the Gloucester County Council has passed a resolution with reference to the refusal of the Government to make further grants out of the Unemployment Fund towards the cost of land drainage; and whether, in view of the special circumstances mentioned in this case, the Government will reconsider their decision?

Sir A. BOSCAWEN: I have received a copy of the resolution from the Gloucestershire County Council. The cessation
of all drainage work on 31st May, 1922, was one of the chief conditions imposed by His Majesty's Government when considering drainage schemes as a means of alleviating unemployment, and that condition was accepted by drainage authorities and county agricultural committees when applying for grants from public funds to enable them to carry out schemes. As, however, I have ascertained that certain schemes have been unavoidably delayed by bad weather during April, I have obtained certain concessions which will enable the scheme to which the hon. Member refers, among others, to be continued, if necessary, to 30th June, so that it may be completed. Beyond this the Government is not prepared to vary its original decision.

CATTLE (IMPORTS).

Mr. W. SHAW: 90.
asked the Minister of Agriculture if he can state the number of cattle landed at the ports of the United Kingdom for slaughter during the year ending 30th April, 1922; and the numbers received from the respective countries?

Sir A. BOSCAWEN: The number of cattle landed in the United Kingdom for slaughter during the year ended 30th April last was 77,376, of which 43,539 came from the United States and 33,837 from Canada.

RENT RESTRICTIONS ACT.

Sir C. YATE: 97.
asked the Minister of Health if he will have inquiry made from County Court judges and other persons who have been administering the Rent Restrictions Act as to how that Act is working throughout the country and as to how far and in what respect it has failed, with a view to bringing the Act to an end if necessary sooner than the specified time?

The MINISTER of HEALTH (Sir Alfred Mond): I do not think it necessary to make further inquiries at the present time. A considerable amount of information on this subject is already in my possession, and I cannot undertake to introduce legislation for the purpose suggested.

DEATHS FROM STARVATION.

Mr. MARRIOTT: 99.
asked the Minister of Health whether he will resume the annual publication of a return of the deaths of persons found by verdict of an inquest to be from starvation or accelerated by privation?

Sir A. MOND: No, Sir. For the reasons given in reply to a question by the hon. Member for Durham, of which I will send my hon. Friend a copy, I do not think that the revival of this return would serve any useful purpose.

BIRTH, DEATH AND MARRIAGE CERTIFICATES

Sir CHARLES SYKES: 101.
asked the Minister of Health whether his attention has been called to the delays which occur in the Registrar-General's Department in supplying certificates of birth, death and marriage; whether he is aware that a period of three weeks often elapses before the certificate can be obtained; and why the fee for search and certificate has been increased from 3s. 7d. to 5s. 7d.?

Sir A. MOND: No, Sir; nor am I aware of any facts which support the suggestions contained in the question. Certificates are supplied in under an hour to applicants in person who furnish correct particulars, and applications by post are dealt with in a few days only—seldom as long as a week—from the receipt of the necessary fees, though naturally it may take longer where incomplete or incorrect particulars are given. With regard to the last part of the question, the charge for the services of the Department in searching for an entry, when undertaken for the convenience of an applicant who prefers that course to exercising his own rights of searching, has been increased from 1s. to 2s. 6d. in accordance with the recommendation in the Third Report of the Geddes Committee, making, with the statutory fee of 2s. 7d. for the certificate, a total of 5s. 1d., and not, as stated in the question, of 5s. 7d.

Sir C. SYKES: On a point of Order. I do not think it fair for hon. Members to ask questions, and not to hear a word. I am not blaming the right hon. Baronet, but I should like to point out that a good many people lose a lot of money
by not getting their certificates and, at any rate, may I suggest the Department might send a reply sooner than 10 days?

POOR LAW ADMINISTRATION (POPLAR).

Sir R. BLAIR: 102.
asked the Minister of Health, in view of the fact that the ratepayers of Poplar have a redress at the next election, if he is aware that some 14,000 persons in receipt of outdoor relief are also voters, and therefore not likely to vote against the present givers of lavish relief; that out of a total rateable value of £936,871, nearly two-thirds represents hereditaments which pay rates, but are practically not represented on the electorate; and whether he is prepared to prevent persons in receipt of outdoor relief from voting at elections, and also to bring in a Bill to give adequate voting power to those who now pay two-thirds of the rates, but have no votes?

Sir A. MOND: I have no power to prevent persons in receipt of out-relief from voting at elections. The hon. Member's suggestion for legislation involves principles which are not suitable for discussion by question and answer.

Sir R. BLAIR: Is the right hon. Baronet's policy to do nothing until some unconstitutional action takes place and then bring in panicky legislation?

Sir A. MOND: I do not think anything in the reply I have given ought to induce the hon. Member to take the view he has just expressed.

Mr. W. THORNE: Are the Poor Law Guardians in Poplar in any way breaking the law?

Oral Answers to Questions — POST OFFICE.

PARCELS.

Sir W. DAVISON: 94.
asked the Postmaster-General whether he is aware of the great hindrance to business men and loss of revenue to the Post Office by reason of the continuance of the parcel post rate of 9d. for parcels up to 2 lbs. limit, being 200 per cent. increase on the pre-War rate of 3d. for a 1-lb. parcel; and whether, under these circumstances, he will arrange for a new rate of 4½d. to
be charged in the case of parcels up to 1 lb. in weight, thereby providing a stimulus to trade and probably an increased revenue to the Post Office?

The ASSISTANT POSTMASTER-GENERAL (Mr. Pike Pease): As stated in reply to previous questions on this subject, my right hon. Friend would be glad to make the parcel post more attractive to traders generally, but as the existing rates are not remunerative, he cannot see his way to reduce them at present.

Sir W. DAVISON: Does not the right hon. Gentleman see that the reason the existing rates are not remunerative is because they are prohibitive, and if he reduced it to a smaller sum his income would be increased?

Mr. PEASE: I can assure the hon. Gentleman that matter has been well considered.

TEMPORARY SORTERS (DISCHARGE).

Mr. W. THORNE: 96.
asked the Postmaster-General whether temporary sorters are now being discharged after a period of 7½ years' service; whether, at the elimination of the present excessive overtime being performed by the regular staff within his Department, he could stay the present discharges; and, if so, would he inform the discharged temporary men accordingly or grant them a gratuity on compassionate grounds of length of service to compensate them in their present economic needs?

Mr. PEASE: The employés referred to were engaged during the War in a purely temporary capacity to replace officers absent with the Forces, and their services are being dispensed with in ordinary course on the resumption of normal conditions. I regret that these officers are not eligible for gratuities under Section 4 of the Superannuation Act of 1887. The average overtime now being performed in the London Postal Service is comparatively small in amount, and affords no justification for additional staff. Should, however, the employment of further temporary staff be necessary, the Post Office is pledged to give preference to ex-service men. By means of a special competition held in September last, temporary officers were afforded an opportunity of securing permanent appointments.

BUSINESS OF THE HOUSE.

Sir DONALD MACLEAN: Can the Leader of the House say whether he intends to move the second Motion, standing in his name to-day, with respect to the sitting of the House tomorrow, and, if not, can he say what are the arrangements for to-morrow? Can he also kindly repeat to the House what was said earlier in the proceedings about the probable date on which the Irish statement will be made?

Mr. CHAMBERLAIN: As regards the two Motions in my name, I do not propose to move the second one, relating to the earlier sitting of the House to-morrow. I suggest that the House should meet at the usual hour to-morrow.
As regards the first Motion standing in my name, relating to the business to be taken to-day, I propose to move it with the omission of the Constabulary (Ireand) Bill, in consequence of my right hon. Friend the Chief Secretary being unable to be present owing to a family bereavement. We no longer think it possible to suggest the Adjournment of the House to-morrow. My right hon. Friend has stated earlier that he hopes to make a statement about Ireland either to-morrow or on Wednesday.

We propose to take the Motion for Adjournment on Wednesday.

Lord ROBERT CECIL: At Eleven o'clock.

Mr. CHAMBERLAIN: Yes, I think so, but I will put down a Motion. I would not like to bind myself at this moment to move it. It may be necessary to meet later in order that the statement on Ireland may be made.
To-morrow, we propose to take some of the minor Orders on the Paper, including the Constabulary (Ireland) Bill, the Harbours, Docks, and Piers (Temporary Increase of Charges) Bill, and other Orders which may come down from Committees Upstairs, and, if time permits, the Foreign Office Supplementary Estimates.
I hope to make a statement to-morrow as to the business to be taken on the re-assembling of Parliament.

Motion made, and Question put,
That the Proceedings in Committee on Law of Property [Stamp Duty, etc.], and on the Resolution relating to National Health Insurance [Expenses] be exempted at this day's Sitting from the provisions of the Standing Order (Sittings of the House.)"— [Mr. Chamberlain.]

The House divided: Ayes, 273; Noes, 54.

Division No. 125.]
AYES.
[4.12 p.m.


Adair, Rear-Admiral Thomas B. S.
Buchanan, Lieut.-Colonel A. L. H.
Du Pre, Colonel William Baring


Adkins, Sir W. Ryland D.
Buckley, Lieut.-Colonel A.
Ednam, Viscount


Amery, Leopold C. M. S.
Bull, Rt. Hon. Sir William James
Edwards, Major J. (Aberavon)


Armstrong, Henry Bruce
Burdon, Colonel Rowland
Elliot, Capt. Walter E. (Lanark)


Ashley, Colonel Wilfrid W.
Burn, Col. C. R. (Devon, Torquay)
Elliott, Lt.-Col. Sir G. (Islington, W.)


Bagley, Captain E. Ashton
Butcher, Sir John George
Elveden, Viscount


Baird, Sir John Lawrence
Campion, Lieut.-Colonel W. R.
Evans, Ernest


Baldwin, Rt. Hon. Stanley
Carr, W. Theodore
Eyres-Monsell, Com. Bolton M.


Balfour, George (Hampstead)
Casey, T. W.
Falcon, Captain Michael


Banbury, Rt. Hon. Sir Frederick G.
Cautley, Henry Strother
Falle, Major Sir Bertram Godfray


Barlow, Sir Montague
Chadwick, Sir Robert Burton
Fell, Sir Arthur


Barnes, Rt. Hon. G. (Glas., Gorbals)
Chamberlain, Rt. Hn. J. A.(Birm.,W.)
Fisher, Rt. Hon. Herbert A. L.


Barnatt, Major Richard W.
Chamberlain, N. (Birm., Ladywood)
Ford, Patrick Johnston


Barnston, Major Harry
Cheyne, Sir William Watson
Forrest, Walter


Bartley-Denniss, Sir Edmund Robert
Child, Brigadier-General Sir Hill
Fraser, Major Sir Keith


Beauchamp, Sir Edward
Churchill, Rt. Hon. Winston S.
Frece, Sir Walter de


Beckett, Hon. Gervase
Clay, Lieut.-Colonel H. H. Spender
Gange, E. Stanley


Bellairs, Commander Carlyon W.
Clough, Sir Robert
Gardiner, James


Benn, Sir A. S. (Plymouth, Drake)
Cobb, Sir Cyril
Gee, Captain Robert


Bennett, Sir Thomas Jewell
Cohen, Major J. Brunel
George, Rt. Hon. David Lloyd


Bethell, Sir John Henry
Colfox, Major Wm. Phillips
Gibbs, Colonel George Abraham


Betterton, Henry B.
Colvin, Brig.-General Richard Beale
Gilmour, Lieut.-Colonel Sir John


Birchall, J. Dearman
Cooper, Sir Richard Ashmole
Glyn, Major Ralph


Blades, Sir George Rowland
Coote, Colin Reith (Isle of Ely)
Goff, Sir R. Park


Blair, Sir Reginald
Courthope, Lieut.-Col. George L.
Goulding, Rt. Hon. Sir Edward A.


Boscawen, Rt. Hon. Sir A. Griffith-
Cowan, D. M. (Scottish Universities)
Grant, James Augustus


Bowles, Colonel H. F.
Craik, Rt. Hon. Sir Henry
Green, Joseph F. (Leicester, W.)


Bowyer, Captain G. W. E.
Curzon, Captain Viscount
Greig, Colonel Sir James William


Boyd-Carpenter, Major A.
Daiziel, Sir D, (Lambeth, Brixton)
Grenfell, Edward Charles


Brassey, H. L. C.
Davidson,J. C. C.(Hemel Hempstead)
Gritten, W. G. Howard


Bridgeman, Rt. Hon. William Clive
Davies, Alfred Thomas (Lincoln)
Guest, Capt. Rt. Hon. Frederick E.


Brittain, Sir Harry
Davies, Thomas (Cirencester)
Gwynne, Rupert S.


Broad, Thomas Tucker
Davison, Sir W. H. (Kensington S.)
Hacking, Captain Douglas H.


Bruton, Sir James
Doyle, N. Grattan
Hall, Rr-Adml Sir W. (Liv'p'l,W.D'by)


Hamilton, Major C. G. C.
Marks, Sir George Croydon
Scott, Sir Leslie (Liverp'l, Exchange)


Hannon, Patrick Joseph Henry
Marriott, John Arthur Ransome
Seddon, J. A.


Harms worth, C. B. (Bedford, Luton)
Martin, A. E.
Seely, Major-General Rt. Hon. John


Harmsworth, Hon. E. C. (Kent)
Mildmay, Colonel Rt. Hon. F. B.
Sharman-Crawford, Robert G.


Harris, Sir Henry Percy
Molson, Major John Elsdale
Shaw, Hon. Alex. (Kilmarnock)


Henderson, Major V. L. (Tradeston)
Mond, Rt. Hon. Sir Alfred Moritz
Shaw, William T. (Forfar)


Herbert, Col. Hon. A. (Yeovil)
Morden, Col. W. Grant
Shortt, Rt. Hon. E. (N'castle-on-T.)


Herbert, Dennis (Hertford, Watford)
Moreing, Captain Algernon H.
Sprot, Colonel Sir Alexander


Hilder, Lieut.-Colonel Frank
Morrison-Bell, Major A. C.
Stanley, Major Hon. G. (Preston)


Hills, Major John Waller
Munro, Rt. Hon. Robert
Steel, Major S. Strang


Hoare, Lieut.-Colonel Sir S. J. G.
Murray, C. D. (Edinburgh)
Stephenson, Lieut.-Colonel H. K.


Hohler, Gerald Fitzroy
Murray, Hon. Gideon (St. Rollox)
Stevens, Marshall


Holbrook, Sir Arthur Richard
Neal, Arthur
Stewart, Gershom


Hope, Lt.-Col. Sir J. A. (Midlothian)
Newman, Colonel J. R. P. (Finchley)
Strauss, Edward Anthony


Hopkins, John W. W.
Newman, Sir R. H. S. D. L. (Exeter)
Sueter, Rear-Admiral Murray Fraser


Hopkinson, A. (Lancaster, Mossley)
Newson, Sir Percy Wilson
Surtees, Brigadier-General H. C.


Home, Sir R. S. (Glasgow, Hillhead)
Nicholl, Commander Sir Edward
Sutherland, Sir William


Hotchkin, Captain Stafford Vere
Nicholson, Brig.-Gen. J. (Westminster)
Sykes, Colonel Sir A. J. (Knutsford)


Howard, Major S. G.
Nicholson, Reginald (Doncaster)
Sykes, Sir Charles (Huddersfield)


Hume-Williams, Sir W. Ellis
Nicholson, William G. (Petersfield)
Taylor, J.


Hunter, General Sir A. (Lancaster)
Nield, Sir Herbert
Thomson, F. C. (Aberdeen, South)


Hurd, Percy A.
Norman, Major Rt. Hon. Sir Henry
Thomson, Sir W. Mitchell- (Maryhill)


Inskip, Thomas Walker H.
Norris, Colonel Sir Henry G.
Thorpe, Captain John Henry


Jackson, Lieut.-Colonel Hon. F. S.
Norton-Griffiths, Lieut.-Col. Sir John
Tickler, Thomas George


James, Lieut.-Colonel Hon. Cuthbert
Ormsby-Gore, Hon. William
Townley, Maximillan G.


Jellett, William Morgan
Pain, Brig.-Gen. Sir W. Hacket
Townshend, Sir Charles Vere Ferrers


Jesson, C.
Parker, James
Tryon, Major George Clement


Jones, Sir Evan (Pembroke)
Parkinson, Albert L. (Blackpool)
Ward, Col. J. (Stoke-upon-Trent)


Jones, J. T. (Carmarthen, Llanelly)
Parry, Lieut.-Colonel Thomas Henry
Ward, Col. L. (Kingston-upon-Hull)


Joynson Hicks, Sir William
Pearce, Sir William
Ward, William Dudley (Southampton)


Kellaway, Rt. Hon Fredk. George
Pease, Rt. Hon. Herbert Pike
Waring, Major Walter


Kelley, Major Fred (Rotherham)
Pennefather, De Fonblanque
Watson, Captain John Bertrand


King, Captain Henry Douglas
Percy, Lord Eustace (Hastings)
Wheler, Col. Granville C. H.


Kinloch-Cooke, Sir Clement
Philipps, Gen. Sir I. (Southampton)
White, Col. G. D. (Southport)


Lambert, Rt. Hon. George
Philipps, Sir Owen C. (Chester, City)
Wild, Sir Ernest Edward


Lane-Fox, G. R.
Pilditch, Sir Philip
Williams, C. (Tavistock)


Law, Rt. Hon. A. B. (Glasgow, C.)
Pollock, Rt. Hon. Sir Ernest Murray
Williams, Lt.-Col. Sir R. (Banbury)


Leigh, Sir John (Clapham)
Pratt, John William
Williamson, Rt. Hon. Sir Archibald


Lewis, Rt. Hon. J. H. (Univ., Wales)
Pretyman, Rt. Hon. Ernest G.
Willoughby, Lieut. Col. Hon. Claud


Lewis, T. A. (Glam., Pontypridd)
Purchase, H. G.
Wills, Lt.-Col. Sir Gilbert Alan H.


Lindsay, William Arthur
Raeburn, Sir William H.
Wilson, Capt. A. S. (Holderness)


Lister, Sir R. Ashton
Rankin, Captain James Stuart
Wilson, Lt.-Col. Sir M. (Bethnal Gn.)


Lloyd, George Butler
Raw, Lieutenant-Colonel Dr. N.
Wilson, Col. M. J. (Richmond)


Lloyd-Greame, Sir P.
Rawlinson, John Frederick Pee[...]
Windsor, Viscount


Locker-Lampson, G. (Wood Green)
Rees, Sir J. D. (Nottingham, East)
Winterton, Earl


Locker-Lampson, Com. O. (H'tingd'n)
Reid, D. D.
Wise, Frederick


Lorden, John William
Remer, J. R.
Wood, Hon. Edward F. L. (Ripon)


Loseby, Captain C. E.
Remnant, Sir James
Wood, Sir H. K. (Woolwich, West)


Lowther, Maj.-Gen. Sir C. (Penrith)
Richardson, Sir Alex. (Gravesend)
Woods, Sir Robert


Loyd, Arthur Thomas (Abingdon)
Richardson, Lt.-Col. Sir P. (Chertsey)
Yate, Colonel Sir Charles Edward


Macdonald, Rt. Hon. John Murray
Roberts, Rt. Hon. G. H. (Norwich)
Yeo, Sir Alfred William


Mackinder, Sir H. J. (Camlachie)
Roberts, Samuel (Hereford, Hereford)
Young, E. H. (Norwich)


McMicking, Major Gilbert
Roberts, Sir S. (Sheffield, Ecclesall)
Young, Sir Frederick W. (Swindon)


Macnamara, Rt. Hon. Dr. T. J.
Roundell, Colonel R. F.
Young, W. (Perth & Kinross, Perth)


Macpherson, Rt. Hon. James I.
Royds, Lieut.-Colonel Edmund
Younger, Sir George


Macquisten, F. A.
Samuel, A. M. (Surrey, Farnham)



Magnus, Sir Philip
Sanders, Colonel Sir Robert Arthur
TELLERS FOR THE AYES.—


Malone, Major P. B. (Tottenham, S.)
Sassoon, Sir Philip Albert Gustave D.
Colonel Leslie Wilson and Mr. McCurdy.


NOES.


Acland, Rt. Hon. Francis D.
Halls, Walter
Rendall, Athelstan


Ammon, Charles George
Hayward, Evan
Roberts, Frederick O. (W. Bromwich)


Archer-Shee, Lieut.-Colonel Martin
Henderson, Rt. Hon. A. (Widnes)
Rose, Frank H.


Asquith, Rt. Hon. Herbert Henry
Hodge, Rt. Hon. John
Royce, William Stapleton


Barnes, Major H. (Newcastle, E.)
Holmes, J. Stanley
Sexton, James


Benn, Captain Wedgwood (Leith)
Jones, J. J. (West Ham, Silvertown)
Spoor, B. G.


Berwick, Major G. O.
Kennedy, Thomas
Thomas, Rt. Hon. James H. (Derby)


Bramsdon, Sir Thomas
Kenworthy, Lieut.-Commander J. M.
Thomas, Brig-Gen. Sir O. (Anglesey)


Cairns, John
Kenyon, Barnet
Thomson, T. (Middlesbrough, West)


Cecil, Rt. Hon. Lord R. (Hitchin)
Kiley, James Daniel
Thorne, G. R. (Wolverhampton, E.)


Clynes, Rt Hon. John R.
Lunn, William
Thorne, W. (West Ham, Plaistow)


Collins, Sir Godfrey (Greenock)
Maclean, Neil (Glasgow, Govan)
Wedgwood, Colonel Josiah C.


Davies, A. (Lancaster, Clitheroe)
Maclean, Rt. Hon. Sir D. (Midlothian)
White, Charles F. (Derby, Western)


Davies, Evan (Ebbw Vale)
Malone, C. L. (Leyton, E.)
Wignall, James


Entwistle, Major C. F.
Mills, John Edmund
Young, Robert (Lancaster, Newton)


Foot, Isaac
Mosley, Oswald



Galbraith, Samuel
Murray, Hon. A. C. (Aberdeen)
TELLERS FOR THE NOES.—


Gillis, William
Murray, Dr. D. (Inverness & Ross)
Major McKenzie Wood and Mr. Myers.


Graham, W. (Edinburgh, Central)
Naylor, Thomas Eilis



Griffiths, T. (Monmouth, Pontypool)
O'Connor, Thomas P.

PERSONAL EXPLANATION (SIR E. WILD).

Sir ERNEST WILD: I desire to claim the indulgence of the House while I make a short statement which I think it proper to make owing to the duty which I owe to this House, to my brethren of the Court of Aldermen of the City of London, to the Lord Chancellor, the head of my profession, to my constituency, and, incidentally, to myself. May I remind the House, very shortly, of a few facts. On the 28th March, having been elected Recorder of London by the Court of Aldermen and having received His Majesty's assent to exercise judicial functions, I took the Oath. At that time there had been no suggestion of any sort or kind that it was improper for me to continue to be a Member of this House. There was no condition and no suggestion. Indeed, there is precedent upon precedent of Recorders of London being and continuing to be Members of the House of Commons. Since the year 1850, of the five Recorders who have preceded me, four were Members and continued to he Members of this House—Stuart Wortley, Russell Gerney, Sir Thomas Chambers, and Sir Charles Hall. Sir Charles Hall was not only a Member of this House while Recorder of London, but he exercised jurisdiction over his own constituents, because he was Member for Holborn. On the 26th April my hon. Friend the Member for Twickenham (Sir W. Joynson-Hicks) put a question to the Attorney-General:
Whether the acceptance of the office of Recorder of London by a Member of this House vacates his seat?
and the Attorney-General's answer was:
The answer is in the negative."—[OFFICIAL REPORT, 26th April, 1922; col. 543, Vol. 153.]
On the 10th May, my hon. Friend put a question which he had deferred by request to the Leader of the House, and the House will recollect the reasoned answer of the Lord Privy Seal. Therefore, I need not trouble the House by reading it again. I had no notice of that answer. I make no complaint of that fact, because I know it was impossible to give me notice, but, in the course of the answer, my right hon. Friend said,
The Lord Chancellor would feel great surprise if the Corporation, in filling this high office, contemplated that the judge so appointed would remain for any considerable length of time in the House of Commons.
Further on he said:
The Lord Chancellor is placing himself in communication with the Corporation and the Recorder, and does not anticipate that any serious disagreement upon the matter of policy involved is likely to arise."—[OFFICIAL REPORT, 10th May, 1922; col. 2172, Vol. 153.]
Under those circumstances I took the course which, I venture to hope the House will agree, was the only dignified and proper course, and that was to leave myself unreservedly in the hands of the Lord Chancellor and of the Court of Aldermen. I interviewed the Lord Chancellor, and the Lord Chancellor wrote a reasoned letter to the Court of Aldermen from which I need not quote, because it has been published in this morning's and yesterday's newspapers, published, as I understand, at the express desire of the Lord Chancellor. I therefore only wish to quote two short passages from that letter:
It is, as the Court of Aldermen are aware, that the Recorder of the City of London ought not permanently to occupy a seat in Parliament. The Lord Chancellor would not push this view to so pedantic an extreme as to suggest that it is incumbent upon anyone appointed to that office immediately to resign his seat. He thinks that anyone in Parliament at the time of his appointment might reasonably continue to retain his seat for some months, but he does not think in any event that he ought again to submit himself to the suffrage of the electors.
Towards the end of the letter His Lordship says that
he regards it as most desirable that the connection of Sir Ernest Wild with his constituency should be severed at some comparatively early but convenient date, such as, for example, the occurrence of the next General Election.
That letter was considered by the Privileges Committee of the Court of Aldermen, who came to the decision
that Mr. Remembrancer do inform the Lord Chancellor that the Court of Aldermen will recommend Sir Ernest Wild to take the course the Lord Chancellor suggests.
Having therefore left my position—it is not only a personal position, but also the position of a trustee for the privileges of the City—in the hands of the Court of Aldermen, I intend to act on that recommendation. I need not trouble the House for many moments with the reasons which actuate me in taking this course. May I just mention three? First, there is no doubt in my own mind that the Lord Chancellor is right when he says that the analogy between the Recordership of London and a High
Court Judge is closer than that of any other Recorder, for this reason, that the Recordership of London involves practically continuous sittings and has very large powers. In the second place, and here I am speaking entirely for myself, I cannot avoid feeling that public opinion, if public opinion may be gauged from the newspapers, is against my standing for Parliament while I am Recorder of London. I may say that that public opinion is in no way reflected in my own constituency, because from no constituent and from no party in my constituency have I received any kind of intimation that they desire me not again to contest the seat. I was reading the other day that great speech which Lord Macaulay delivered in this House on 1st June, 1853, and this sentence struck me:
For it is important, not only that the administration of justice should be pure, but that it should be unsuspected.
I do not think it desirable, speaking entirely for myself, that anybody should be able even to suspect one's honest attempts to administer justice. The third reason which actuates me is that, although nobody can predict the complexion of the next Parliament, I do not think it unreasonable to suggest that parties may not be so unequally divided as they are in this, and, in those circumstances, it would be quite impossible for a man with the labours of Recorder of London on his shoulders to do his duties to this House and to his constituents. I think, with the Lord Chancellor, that there is a vast difference between remaining in this House where, as Lord Macaulay says:
There are extensive and peaceful provinces of Parliamentary business far removed from the field of battle where hostile parties encounter each other.
and again contesting an election. Therefore, my decision is this, that, while asserting my privilege and that of the Corporation, I shall, in the exercise of my discretion, guided by the judgment of the Lord Chancellor and the recommendation of my brethren of the Court of Aldermen, continue my membership for this waning Parliament, but not seek re-election. May I conclude by saying that this decision causes me considerable personal pain. I had for 14 years been endeavouring to become a Member of this House, and now I have to relinquish my seat after four or five years. I have
made abiding friendships, and I have received generosity from all quarters of the House. There has been practically no pressure brought upon me by any Member of this House not again to contest my seat. Where that pressure has been brought, I am perfectly certain that it does arise from any personal consideration. But there are ideals which I think are greater than any personal consideration. One of these proudest ideals is the aloofness from party fights of any man who is called upon to exercise great and continuous judicial functions.

INDIAN AFFAIRS.

First Report from the Select Committee brought up, and read.

Report to lie upon the Table, and to be printed. [No. 102.]

ESTIMATES.

Second Report from the Select Committee, with Minutes of Evidence and Appendices, brought up, and read.

Report to lie upon the Table, and to be printed.

RIVER CAM CONSERVANCY BILL.

Reported, with Amendments; Report to lie upon the Table, and to be printed.

IMPRISONMENT OF A MEMBER.

Mr. SPEAKER informed the House that he had received the following letter from Mr. Justice A. C. Salter, relating to the imprisonment of Mr. Horatio Bottomley, a Member of this House:

"Central Criminal Court,

City of London, E.C.4.

29th May, 1922.

To the Right Honourable the Speaker of the House of Commons.

SIR,

I have to inform you that Horatio Bottomley, a Member of the House of Commons, was convicted before me at this Court to-day of misdemeanour, and was sentenced to seven years' penal servitude.

I am. Sir,

Your obedient servant,

A. C. SALTER."

Orders of the Day — FINANCE BILL.

Order for Second Reading read.

Motion made, and Question proposed, "That the Bill be now read a Second time."

Colonel WEDGWOOD: I beg to move, to leave out the word "now" and, at the end of the Question, to add the words "upon this day six months."
This is the first time, certainly in my recollection, that the Labour party have moved the rejection of the Finance Bill. It is therefore necessary for us to make a particularly strong case to justify us in the step which is being taken. It seems to me that in this case our grounds are sufficiently strong to justify that course. In every previous Budget, I think the Chancellor of the Exchequer and the Lord Privy Seal will agree, the Labour party have always agreed with the recommendations that have been made and have put up with the additional taxation that has been imposed. They have agreed to shouldering the burden of the war and letting that burden lie in no small degree upon the shoulders of those people least able to bear it. But the Budget before us to-day is a change from the old Budgets. For the first. time there is to be a substantial remission of taxation, and our objection to this Budget is simply this, that in that remission of taxation the vested interests have been thought of first and the common people only second. Our objection to this Budget is that it is a rich man's Budget, and that where taxation has been reduced, it is the vested interests that have secured that boon.
But I have a further objection to this Budget. It is not merely that that remission of taxation has taken place in quarters where it is least required, but that there is no proper case for any reduction in taxation at all. What should have happened was a reduction in expenditure, and that that reduction in expenditure should have translated itself into reduction of debt. All the canons of sound finance are upset by this Budget. I will deal first with the changes suggested in this Budget. There is 1s. off Income Tax, which reduces taxation by £32,000,000 this year and by £52,000,000
in all subsequent years. The whole surplus was only £45,000,000 odd, even after all repayment of debt had been brought to an end. It is remarkable about the reductions of taxation proposed in this Budget that the smaller portion falls in this year and that a larger reduction in revenue will take place next year. The Chancellor of the Exchequer, following the example of certain Chancellors in the past, has left his successor to carry the baby. The next Chancellor of the Exchequer will have to find the revenue to make up for the omissions of the present Chancellor of the Exchequer.
This year the Income Tax payer is to pay £32,000,000 less, and the right hon. Gentleman just manages by this to balance his Budget. Next year £52,000,000 will have to be found, and the Income Tax is reduced because above all things the Chancellor of the Exchequer was going to save the trade of the country. In a very eloquent passage in his speech he referred to unemployment. He began his plea in favour of the reduction of Income Tax by referring to unemployment at the present day. Is it likely that is. off the Income Tax will benefit trade and solve the unemployed problem, or do any of those things Which were held out by the right hon. Gentleman so well as a reduction in the National Debt? What we save in Income Tax is very likely to be squandered, but what money he had used and has used for the repayment of debt is not squandered. That money goes into trade. It is reinvested when it is paid off. The man who has a loan paid back re-invests his money and develops trade. I maintain that if the right hon. Gentleman had been seeking solely to improve the trade of the country, he would have retained the Sinking Funds and would have continued to do as all Chancellors of the Exchequer have done in the past ?he would have continued to pay off debt and would have realised that in the repayment of debt you have the soundest cure for the bad trade of the country and the best prospects of its revival. The reduction of debt means cheap money it means reducing the interest on the National Debt; it means facilities in conversion: it means less charges year by year.

Sir G. YOUNGER: What about America?

Colonel WEDGWOOD: In any case, if we have to repay America some time, it is better that the repayment should take place and that we should reduce our capital liabilities rather than that well-to-do people should be able to spend more money on going abroad or in any other way. Squandering is not good for trade. That is the first principle we have to realise. It is not good, whether it be squandering on the part of the rich or on the part of the workers. [HON. MEMBERS: "Agreed! "] I am glad that that is agreed. Then the best thing is not to reduce the charge upon big incomes in order that the rich may spend more, but to use the revenues, so far as we can spare the money, for the repayment of Debt and the cheapening of charges upon our Debt. What was remarkable last year? We paid off £80,000,000 net of Debt. The remarkable result of that was that the Chancellor of the Exchequer was able month by month and week by week to borrow more cheaply. Treasury Bills, as they fell in week by week, were renewed at cheaper and cheaper rates, so that the charges upon the Floating Debt became enormously less as the year went on. The Chancellor of the Exchequer could not have done that if he had not saved money and if he had not been in a position to pay off Debt. Next year, when, according to the Budget, we are exactly to balance without paying off any Debt, we may find, as the weeks go on, that, instead of being able to borrow more and more cheaply, we shall have to find heavier and heavier rates of interest upon the Floating Debt. Nor is that all. If you have to find heavier charges for a Floating Debt, you have also to borrow money at a higher rate.
We are anxious, above all, to reduce the interest on the National Debt by the perfectly honest way of converting the debt as money becomes cheaper. But the proposals made by the Government absolutely forbid any conversion of that sort. Money will get more expensive; the price which the man who has money will be able to charge for lending that money will go up under this Budget, and instead of the State being in the happy position that it was in last year, it will find it difficult to make both ends meet without being forced by the owners of money to pay a very high rate of interest. This is a Budget to "save the
trade of the country by reducing the Income Tax. That is not half as useful as saving the trade of the country by the reduction of debt. The Lord Privy Seal, who has just entered the House, knows that quite well. If this new policy of the new Chancellor of the Exchequer be right, if it be right to cease repaying Debt in order to cut down taxation, why did the Lord Privy Seal, the previous Chancellor of the Exchequer, carry out an exactly opposite policy for three years? Why did we have the Prime Minister coming forward and pledging his party to repay the whole of the National Debt in 50 years, and to carry out a scheme of repayment of a heroic character in order to re-establish the trade of the country? All that sound finance has gone. We have the new finance of the Coalition in difficulties; the Coalition in difficulties because for the first time the Press was against them. The Press is their master. Their principles are sound enough, but the "Daily Mail" can break any principle, with the result that we have the Income Tax reduced by s. and debt not reduced at all.
It has been said that is off the Income Tax is a benefit to everybody and is a benefit to trade. I want to show that reduction of Income Tax is not nearly as good as the reduction by the same amount of the duty on sugar or tea. Not only do more people benefit by the reduction of the tea or sugar duty than by the reduction of Income Tax, but the trade of the country benefits also far more. If the Income Tax be reduced it is the well-to-do people who benefit. They do not spend all their money in this country. They do not all spend their money on the necessary support of themselves and their families. More of it is squandered and the larger proportion is spent in ways that are not essential to the welfare of the community. But in so far as money is saved on sugar, the whole community, particularly those who have not any surplus income with which to play, will benefit. They all spend more money at the end of the week; they are all able to buy more; and the more goods they want the more people are employed in making those goods. So that the trade of the country will benefit far more by the reduction of a tax which falls upon the poor than by the reduction of a tax which falls upon the rich.
Let us look at this Budget item by item and see whether it is not indeed a Budget, the whole idea of which is to reduce the taxation upon the rich. Last year the expenditure of the country was increased by a gift of £50,000,000 to the railway interests. It was nominally for arrears of maintenance, but was actually distributed in large measure in dividends within the last six months. There you had an admirable illustration of how expenditure increases and how certain vested interests benefit by that expenditure. £50,000,000 was a generous recognition of any possible services that the railways could have rendered during the War, and anyone reading the Colwyn Report will see that it certainly did not show, as it would have done this year no doubt, the vigilant eye of the Treasury with a view to cutting it down. If the right hon. Gentleman doubts whether that £50,000,000 was a legitimate payment, let him look at the way in which the ordinary stocks of railways have risen during the last six months. Since that gift was made and the Railway Bill was passed the ordinary stocks of nearly every railway have risen about 50 per cent. The Government succeeded in making a present. Is there any denial? I am sorry to have drawn a hornet's nest, but I ask hon. Members who are in the fortunate position of owning railway shares to observe the results of their legislation last year?very pleasant results for the shareholder, but a charge on the whole of the community.
This year, at any rate, we may hope that there will be no more £50,000,000 for the railway interests. They hardly need it any longer. Last year also there was the £17,000,000 for the agricultural interests. That charge is fortunately not to be repeated this year, and it means a very satisfactory reduction of expenditure in prospect for next year. Even this year we see the same process going on. I would draw attention, first, to the railway interests, in order to show how they are to get something even out of this Budget which is to "save trade." They are the friends of the Government, and they stand to get their slice of the cake. When the Corporation Profits Tax was introduced three years ago it was shown to the House that the tax fell most unfairly upon statutary companies. It was proved that if the tax of is. in the £ on profits were levied upon statutary companies, the unfortunate companies
would not be able to pass the tax on to the consumer. When that was made clear the Government, showing a ready appreciation of their friends, exempted the statutary companies from Corporation Profits Tax. No sooner had the statutary companies got their exemption than the railway companies got up too and protested that they were in the same position as the statutary companies, and that they would not be able to pass the tax on, and that the shareholders would have to pay it. The Chancellor of the Exchequer exempted the railway companies from the tax. That left the tax only on those businesses that could pass it on to the consumer.
The exemption of the railway companies was to extend to only three years. The companies were then controlled by the State. Now they are no longer controlled by the State. Their shares have risen by leaps and bounds. We are told that the grounds which induced the Government three years ago to exempt the railway companies from the tax are still there. They are. The companies cannot pass on the tax. Therefore, the grounds being the same, the railway companies are still exempted from the tax. That exemption amounts to about £3,000,000 a year for the railway companies and the statutory companies. So that the first persons to have a slice of this cake are the railway interests, which have strangled the trade of the country by heavy freight rates and fares and are preventing the revival both of trade and of agriculture. They are getting £2,500,000 by the extension of this exemption. Would it not have been possible for the Chancellor of the Exchequer, when making this present to the railway interests, to have got some sort ofquid pro quo from the railway interests, some reduction in freight rates for a save4he-trade Budget?
Then I turn to the next friend of the Government to get a slice of the cake, and that is the agricultural interest. The agricultural interest got £17,000,000 last year as a settlement for the withdrawal of the advantages which they enjoyed the year before. The amount that the agricultural interest will get this year is not great, but next year the farmers and the landlords, by having Income Tax levied upon their annual rental instead of their annual revenue, are to benefit, and the
taxpayer is to lose £2,150,000, and as long as the Income Tax continues to be based on the annual rental, the State will continue to be £2,150,000 to the bad. The real disaster of a change such as this is that it is not easily altered again. If a man buys or sells land, he does so subject to certain charges upon the land. If I know that Income Tax is charged on the full assessable value I naturally pay less for that land, if I am buying it, than I otherwise should. But once the State comes along and says, "We will divide your Income Tax by two," I immediately put up the price of the land, if I am going to sell to somebody else if the Income Tax is less than it used to be, the buyer is prepared to pay a bigger price for the land, so, in the long run, it does not cheapen production or assist the man who produces food from the land; it merely adds to the capital value of the land throughout the country. The production of food is no more cheap than it was before. If you took away the Safeguarding of Industries Act and removed the tax on imports into this country, then not only the importer would benefit, but also the consumer. By this reduction on the Income Tax levied upon farmers, you are merely putting something straight into the landlords' pockets. Indeed, you are not giving the landlords £2,150,000 but 20 times that—20 years' purchase of the amount of the reduction. The right hon. Baronet the Member for the City of London (Sir F. Banbury) knows quite well that by this act of the Chancellor's we are giving away, not £2,000,000, but £43,000,000, and adding that amount of money to the land value of the country. Let me say, in passing, that the reduction of Income Tax upon farmers is not a real benefit to the man who farms and who, even at the present time, calculates his Income Tax really upon his profits. Any man who considers himself to be paying on more than his real income can supply his hooks to show his real profits and get his Income Tax levied upon the real profits. We think that should be done all through, and that every farmer should pay upon the real profits, and we object to a. change in the system which makes it more and more impossible to get at the real profits of the farmer.
The right hon. Gentleman the Chancellor of the Exchequer has done an even
more extraordinary stroke of business for the improvement of trade. Being pressed by the vested interests, and no doubt approached by the Land Union, he has seen to it that amenity land should be treated even better than the land of farmers who try to make some use of it. Amenity land, I take it, includes parks that produce nothing but deer. It is, of course, regarded as monstrous that they should be charged upon what they might be worth if they were used productively. That would be most unfair, and therefore amenity land, which is not used for farming, because it looks so much more beautiful out of cultivation?at least, that is the meaning of the phrase, and, as far as I can read, the Bill, that is the sort of land referred to?is not even to be assessed for Income Tax at its full annual value, based upon rent. It is to be assessed upon one-third of its annual value, and, naturally, the tendency will be, and the temptation will be present to every landlord, to convert his land more and more into amenity land, and to use it less and less for productive purposes. It will be to his advantage that his land should not be cultivated because the less he uses the land, the lower will be the charge on it for Income Tax and the lower the charge for local rates. He will benefit all round, but the country will lose. There will be less production of food, fewer people employed, and more bad trade because, mark you, unemployment in the primary trades means unemployment throughout the whole country. If the agricultural labourer is thrown out of work, if the farmer is not given land to cultivate, and if he has to go to Australia in order to produce food, it is not only the farmer and the agricultural labourer who suffer, but the makers of agricultural machinery, the builders of houses, the railways, the distributing trades and all the people who otherwise would be satisfying the wants of these cultivators. They also are thrown out of work because the primary trade is deprived of the opportunity of starting work. These two presents to the landlords amount, as I have shown, to nearly £2,500,000 next year, but in fact being a relief of taxation upon land they amount to a present to the landed interest of this country of about £45,000,000 to £50,000,000. I congratulate the Land Union on the success of their pressure, but again I regret that
the trade of the country will suffer by this donation to this deserving vested interest.
Then I come to the Excess Profits Duty. The Excess Profits Duty is going to be reduced this year by £2,000,000 and next year by £3,000,000 by adjustments. I am not prepared to argue the merits or demerits of that alteration. It is too complicated for the ordinary layman to understand, but I would point out that, there too, you have out of this Budget, out of this lucky bag, something drawn by another vested interest. The Federation of British industries is all right. The only benefit we get out of this Budget for the common people is a reduction of the tax upon tea. Th., workers of the country will receive in a full year by the reduction of the Tea Duty a benefit of £[...]00,000. The rest of the community in a full year will receive £61,000,000. That seems to me to be hardly a fair division of the benefits arising from the reduction of taxation. I think we may add that nearly every item in this Budget, except that relating to the Tea Duty, will not help the trade of the country half so much as if that particular reduction in taxation had been applied to the reduction of and towards the abolition of our liabilities. Our charge against the Chancellor of the Exchequer in connection with this Budget is that he has reduced taxation without. reducing expenditure, that he has made his reduction in taxation depend upon the thoroughly unsound financial expedient of putting an end to the repayment of debt, that, further, the reductions which he has been able to make by putting an end to the repayment of debt, have nearly all?five-sixths of them at any rate?been for the benefit of the vested interests of the country and not for the benefit of the consumer. Had the Chancellor wished to make his reductions really beneficial to trade, he would have dealt with some of those charges which fall upon the mass of the people, like the Sugar Duty and the Beer Duty and other charges which are at present adding enormously to the cost of living of the working man. A reduction there would have been far better for the trade of the community than the reductions the right hon. Gentleman has made.
5.0 P.M.
Let it be clearly understood the Labour party's views on finance, in spite of the
aberration—temporary, I hope—of the Chancellor, are still perfectly sound. We have not been convinced, and I do not think we shall be convinced, by the speeches here to-day. We still believe, as the right hon. Gentleman's leader the Lord Privy Seal believes, that the best thing to do to restore the trade of the country is to start paying off debt and getting rid of the millstone which is round the neck of trade. We believe, further, that it is not only right to pay off debt, but it is right, in readjusting taxation, to do so in such a way that it cannot be transferred to the consumer. The Corporation Profits Tax, as at present levied, is a new form of indirect taxation. It is contrary to all books on economics as a direct tax, and is, in fact, the most insidious of indirect taxes. Those who cannot pass it on are exempted, while the public pay through the firm which nominally signs the cheque. Every benefit given to the landed interest merely increases the value of land and thereby makes higher the barrier between the man who wants to get land to start work?the man to whom land is the raw material, which he must get in order to start work. We suggest that taxation should be so altered as to fall upon vested interests and monopolies, that they should not pass it on to the consumer and that a solid, definite effort should be made to pay off the capital indebtedness of this country by a general levy upon capital. A great deal of nonsense is talked about this levy upon capital by people who do not want to pay it. I think it is just and proper, that in asking the House to reject this Budget, we should indicate what we mean by a capital levy. Suppose the wealth of the country, as a whole, to be £20,000,000,000, which is more or less what it is, we find that roughly.£20,000,000,000 of wealth is at present subject to £8,000,000,000 of National Debt. The true wealth of the country is not altered if you reduce nominally the wealth of the individual and, at the same time, reduce the internal indebtedness of the country as a whole. Any transference of capital from assets to liabilities, which is accompanied by a reduction in the National Debt, really does not alter the national balance sheet in the very least. It is not going to make trade any more
difficult to carry on, so long as the proceeds of your capital levy are ear-marked and reserved for the reduction of the National Debt. So long as that is so, the position of the country as a whole remains exactly as it was before.

Mr. A. M. SAMUEL: As this capital is in existence but is mostly immobile, and not in any form of coin, how is the State going to get it, to earmark it and use it, unless it cuts the trade off?

Colonel WEDGWOOD: It need not necessarily be used immediately for the repayment of debt at all. All the difficulties are met in the case that the hon. Member mentions if the company or the business concern waters its capital with a certain number of State property shares. The position is exactly met, and, indeed, any business company in this country today which finds itself with depreciated assets acts wisely at the present. day if it reconstructs itself, writes down its capital, and starts paying dividends again, rather than goes on, as we are going on. attempting to carry on a business, dividend-paying concern while our assets have depreciated, without meeting those debts.

Mr. SAMUEL: That is the very opposite of what you just proposed.

Colonel WEDGWOOD: Really a, capital levy is a reconstruction of the finances of the country, wiping out. the National Debt.

Mr. G. BALFOUR: Will the hon. and gallant Gentleman say what is wealth?

Colonel WEDGWOOD: Wealth is that which is produced by labour out of land. [Laughter.] Can anybody give a better definition? That is the definition taken by all economists, and apparently it is laughed at by people who know nothing whatever about it.

Mr. SAMUEL: What about the fishing industry!

Colonel WEDGWOOD: Not only is a capital levy sound from the point of view of the nation as a whole, but a capital levy is already in operation in this country. The Death Duties at the present time are exactly similar to the capital levy that we propose, but the
Death Duties fall upon occasion?generally on the worst possible occasion —and a capital levy would fall at regular intervals. The Death Duties, unfortunately I think, although they are a charge on capital, are not used for the repayment of debt, but for the ordinary expenditure of the country. To my mind, any change from those Death Duties, levied on the inconvenient occasion, used for normal revenue and spent in normal expenditure, which should substitute for that a capital levy paid at regular intervals, graduated exactly. as the Death Duties are graduated, and earmarked for the payment of debt?any change of that sort, giving greater security, greater stability, and greater certainty to trade, would be for the advantage of the whole community and would lead to exactly what all financiers in this House know is the right thing, namely, the steady repayment of debt and the steady grounding upon a firm foundation of the finances of this country.
I have dealt, perhaps at undue length, with the question of the alternative method of paying off debt, and I do not propose at this hour to spend any time on the changes in taxation that we desire, beyond saying this, that we would certainly, in levying our taxation?the taxation that would be necessary even after the debt was paid off?levy it in such a way that it could not be transferred to the consumer, instead of selecting, as does this Government, those taxes from all taxes which can best and most certainly be transferred to the community as a whole. Day after day I see rich men getting up at company meetings and at after-dinner performances and saying that they are paying out of their income two-thirds or three-quarters of their income in taxation. They are doing nothing of the sort. They are signing a cheque, it is true, but they are collecting it from all of us. These taxes which are nominally levied upon the rich are so levied upon them now by this Government that they can be passed on to the consumer as a whole, and here, as always, the beggar pays for all.

Mr. MYERS: I beg to second the Amendment. I follow the hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) in asking for the rejection of this Bill because I feel that the Finance Bill, and the Budget
upon which it is based, differentiate unfairly between the various sections of the community. Like many other Budgets which have preceded it, it hits the poorest of the country hardest of any. It is to one or two of the smaller matters which are included in the Finance Bill that I desire to draw attention this afternoon. There are several taxes which are creating considerable interest among large sections of the community in this country. I hold no special brief for that section of the community to whom I am going to refer in the first instance, namely, the members of the various clubs in the country, but I make no excuse for referring to what I believe to be the totally indefensible tax upon the clubs of the country. They had a tax levied upon them a year or two ago of 6d. in the £ upon their receipts. Those receipts have been increased considerably, not because of the additional volume of the articles they are disposing of, but the increase in their receipts, which has seen stupendous, has been due to the fact that heavy taxes have been put on the articles they sell, and the 6d. in the £ continues, with the result that where these clubs paid somewhere in the region of from 30,000 to £60,000 during the past year or two, the prospective call on the clubs of the country is somewhere in the region of £350,000. It is a tax upon a tax, and from that point of view it 17 difficult to defend its operation.
Then we come to the Entertainments Duty. Considerable pressure is being exerted by amusements caterers throughout the country upon the Members in the various constituencies, and here again it is upon the poorest of the people and upon the cheapest amusement that the burden very largely falls. A 5d. admission ticket into an ordinary cinema display pays 2d. in taxation. A 12s. seat at a London theatre?those theatres where these seats are very seldom vacant —pays something in the region of 2s., and the rich people pay 2s. in 12s., while the poor people pay double that amount upon their charge for admission. The Entertainments Duty is inequitable in its operation as between these sections of the community. The hon. and gallant Member for Newcastle-under-Lyme has referred to the inequity which comes from Income Tax as against the indirect taxes on consumers of commodities which
the people require. I have never been a convert to the belief?or at least not to the extent that we have been asked to accept it?that this 1s. off the Income Tax was going to stimulate trade development. I believe that there is plenty of money for trade in this country, and the Chancellor of the Exchequer himself, during the last Budget discussion, said something to the effect that he was very much surprised at the large sums of money which were available where any attractive project presented itself. I think the same holds good to-day, and I should like to give one or two extracts from various newspapers during the last week or two which prove the fact that even now, if an attractive issue is presented to the public, the money is there for development in any direction:
Those may count themselves lucky who were quick enough to secure some of the £1,500,000 7 per cent, first mortgage debentures issued by the Powell Duftryn Steam Coal Company; a sound and attractive offer.
Rapid over-subscription was also the state of the Kellmer Partington paper pulp 7½ per cent. debentures, while the Poole Corporation issue of £359,000 5½ per cent. stock is sad to have been subscribed more than ten times over.
£250,000 of the Calcutta Tramways second debentures were offered for subscription last. 2ek, and for the allotment small applicants fared badly. Those who applied for less than £400 received nothing, and on applications for £400 to £1,000 only £100 to £200 has been allotted.
The tremendous rush for high-class issues is sustained. Lanarkshire's loan of £2,500,000 was over-subscribed in a few hours, Bristol's £1,000,000 was applied for fifteen times over, and the Union Castle debentures were snapped up as soon as the doors wore open.
The outstanding feature of the past week has been the avalanche of subscriptions to the £5,000,000 P.L.M. Railway loan. Officially, the list was open for less than a quarter of an hour, yet it is estimated that applications amounted to something like £50,000,000. The Belfast Corporation received a cordial reception in the case of its offer of 1,000,000 5i per cent. at 96; and the Peter Robinson issue of 750,000 7 per cent. £1 shares was likewise heavily over-subscribed; and the comparatively small issue of 558,360 in £5 shares of the Yorkshire Electric Power Company was covered fifteen or sixteen times over.
The Anglo-Persian Oil Company call for new capital, suggesting a likelihood of 30 per cent. interest, resulted in £75,000.000 being subscribed in a few hours.
There is plenty of money for trade when those people who are looking for reasonable investments are sufficiently attracted
by the prospectuses which are presented, and I think the effect of the 1s. off the Income Tax, which is going to relieve the trading interests of this country to the extent of £50,000,000 a year, from the point of view of the revival of trade, has been altogether over-estimated by those who have advocated that point of view. I said my objection to this Bill was due to the unfair differentiation between one section of the community and another. The Income Tax reduction represents a sum of £50,000,000, which is about equal to the whole of the taxes on tea and sugar. I find that the Sugar Duty for the coming year is estimated to bring in £35,000,000 and the Tea Duty, after the reduction has been made, nearly £12,000,000, so that if the 1s. Income Tax had not been removed and we had been desirous of applying that reduction to the taxation on the foodstuffs of the people, we could have removed the entire taxation on tea and sugar by leaving the Income Tax alone at the present time.
There used to be a school of politicians who advocated, frequently and tenaciously and with some spirit, the demand for a free breakfast table, but somehow they seem to be hiding their light under a bushel in these days, although I am thinking that there is just as much virtue in that cry to-day as there ever has been in our time. It is often asserted, and it is often hurled at us on this side of the House, that we promote what are said to be revolutionary doctrines. I am no revolutionary, but I know a short cut to a revolution in this country, and that short cut is to be found in the direction of telling the people of the country how much they are taxed and what they are taxed for, and if that belief could be implanted in the minds of the people, there would soon be a situation arising which would require some response to be made to the demand of the people under that head. I wonder if it be generally understood or realised by the people of the country that on 1 lb. of tea, 4 lbs. of sugar, two pints of beer and two ounces of tobacco, 3s. 7d. is yielded in taxation, It is a stupendous sum comparatively, and if we can get that into the minds of the people, they will soon demand some alteration. Because of the inequality in the treatment of the wealthy people and very poor section of the population, I
think this Finance Bill, and the Budget on which it is based, are deserving of our criticism and condemnation.
We hear a great deal about reducing taxation. We are entitled to ask those who demand that expenditure shall be reduced, where and at what point will they make a reduction? There is plenty of loose talk upon political platforms about reduction in expenditure, but where and at what point? We are under no misgiving upon that matter, and the first thing we would urge, on the lines of the hon. and gallant Gentleman who submitted this Amendment, is that there shall be a reduction in the Debt. When we have reached a point that interest on Debt and Naval and Military expenditure at the present time take roughly 12s. 6d. out of every pound of national taxation, there is very little left in other directions where expenditure can be cut down, at least to any extent, which will make any great impression upon the burden of taxation. The Government are not reducing the Debt. Not only have they reduced the Sinking Fund for the coming year, but, in response to a question, the Financial Secretary to the Treasury, I believe, a couple of days ago, announced that in 1919 the National Debt increased by £708,000,000.

The FINANCIAL SECRETARY to the TREASURY (Mr. Hilton Young): If my hon. Friend is going to quote me, he might quote what I said.

Mr. MYERS: I am only mentioning the bare fact that the National Debt in 1919 increased by £708,000,000, and the hon. Gentleman gave figures which illustrated that point. He qualified it by saying that £140,000,000 of that was due to the conversion of one form of National War Loan into another, and this financial manœuvring which is going on?and I use the word with all the implication it conveys?of paying one person off and borrowing from another—[An HON. MEMBER: "Less interest"! An hon. Member says "less interest," but we are converting National War Bonds, which fall due in October, into another form of War stock. We converted it at 95, and all the large financial corporations in the country who hold substantial volumes of this War Stock axe making £5 out of every £100 in the process of conversion. While we are converting at a
lower rate of interest we are adding to the capital Debt, and, so far as I can see, to the general burden of interest in the years to come. If we are going to have a Budget which will be clear of these inequalities, if we are going to have a reduction in taxation, there is one line of attack which needs to be made, and that is an attack on this great burden of Debt. While hon. Members ridicule those who present the Labour point of view of a capital levy, is there any alternative they have to present? Can this country carry for an indefinite period £400,000,000 a year interest on War Debt.? Can we have a revival of trade, can social reconstruction have a decent opportunity while that burden is round the country's neck? If not, and if hon. Members believe that, then it does not break any ice to ridicule the hon. and gallant Member for Newcastle-under-Lyme. If they consider a capital levy to be unsound, we are entitled to ask for an alternative; they must tell us what is desirable to be done in order to remove this great burden from the necks of the people of this country. On these grounds I second the Amendment.

Mr. ASQUITH: I am not going to occupy the time of the House for more than a few moments, because, in regard to the general policy of the Budget, I have nothing to add, after mature reflection, to the impression it made upon me when it was first introduced, which I then endeavoured to convey to the House. I think the surplus?the supposed surplus —upon the realisation of which rests the remission of taxation, urgently needed, I agree, both as regards the Income Tax and as regards indirect taxation, appears still to be in the realm of speculative conjecture. After such conclusions as I can draw from all the available evidence, I doubt whether the forecasts both of revenue and of expenditure are likely to be realised. Let me say at once, I shall be delighted if they are. If my right hon. Friend's gamble comes off, no one will be more pleased than I shall, but, after some considerable experience in these matters, I do not think he has provided to the House of Commons adequate evidence to justify one or the other. But, as I say, I hope my anticipations may be falsified by the result.
That is not the point to which I wish to direct the attention of the House. It
is admitted by the Chancellor of the Exchequer that he can only obtain a surplus, whatever his Estimates may turn out to be, by suspending the Sinking Fund, and by re-borrowing money for the purpose of meeting obligations which mature within the next 12 months. I observe, although I was not, in the House at the time, that, in the course of the last Debate, he used these words:
I admit that my right hon. Friend the Member for Paisley knows much more about tinkering with Sinking Funds than I do."ߞ [OFFICIAL REPORT, 3rd May, 1922; eel. 1423, Vol. 153.]
Let us see what I know about tinkering with Sinking Funds. I was Chancellor of the Exchequer for three years, and during those three years, 1906 to 1909, I reduced the National Debt of the country by over £41,000,000. I raised the annual provision for Debt redemption to a height, £29,500,000, it had never reached before, and, taking the average for the three years in which I was Chancellor of-the Exchequer, we paid off something like £14,000,000 to £15,000,000 of Debt every year. That cannot be disputed. That is a very good way of tinkering with the Sinking Fund. I know I am coming, to a very delicate matter, but the charge made of tinkering with the Sinking Fund, as I think the right hon. Gentleman will agree, was not really addressed to me. I was succeeded by another Chancellor of the Exchequer. I admit to the full I have never repudiated in any way my responsibility as head of the Government for the action, administrative, legislative, or whatever it might be, of any one of my colleagues, particularly in the domain of finance. But I was succeeded by another Chancellor of the Exchequer, and in the Budget speech, which I made in 1908?my last Budget speech?I was, in fact, First Lord of the Treasury?I pointed out that, after the unexampled efforts which our Government had made during the three years for the reduction of Debt, it would be perfectly legitimate for my successor not to give up the repayment of Debt, but to slacken the pace, and I. shall always say so under similar conditions, in order that, out of the full and flowing revenue of the country, a portion of it should be applied, either to the remission of taxes, or, to that which was in those days of importance?and I think is of importance now?the financing of social reform. Let us see what happened. The Prime Minister is not here. He was
Chancellor of the Exchequer during the whole of that time, and the attack made by my right hon. Friend opposite was an attack upon him. But I maintain that his finance was perfectly sound. During the whole of those years in which he was Chancellor of the Exchequer?that is to say, from 1909 until the outbreak of the War?with one exception, we never paid off in any year less than £10,000,000 of Debt. There was one exception, I agree. That was the year when the House of Lords threw out the Budget and dislocated the whole finances of the country?the year 1909-10. In that year, we had to borrow, temporarily, £21,000,000, but, as the official paper, issued on the 4th August last year by the Treasury, says:
This item represents temporary borrowings and Ways and Means advances rendered -necessary up till the passing of the Finance Act, 1909–10. The whale sum was repaid on 13th September, 1910.
These temporary borrowings were necessitated by the action of the House of Lords.

Sir F. BANBURY: But did not the House of Commons and the country afterwards confirm that action?

Mr. ASQUITH: Does the right hon. Baronet consider that observation relecant?

Sir F. BANBURY: Yes.

Mr. ASQUITH: I am talking about Debt, about the Budget of 1909, about the provision being made for the repayment -of Debt. I was pointing out that, with the exception of those temporary borrowings, "repaid in the course of the year, there was no year during which when the -present. Prime Minister was Chancellor of Exchequer we did not repay Debt at the rate of more than £10,000,000 a year. What becomes of this charge of tinkering -with the Sinking Fund? It is claimed by the right hon. Gentleman that he and not the Prime Minister is the true successor to the financial purists of the past. He can settle it with the Prime Minister. After all, however, that is a matter of the past. I want to deal with recent.years which are strictly relevant to the same subject-matter—I mean that of debt ?and as to which, I think, the House of Commons is entitled to a little further information than it has at present.
The Chancellor of the Exchequer claims he has paid off £320,000,000 of debt in two years. As a matter of fact, however, the total debt of the country as it was on 31st March, 1919, four months after the War had finished, and the total debt on 31st March of the present year show substantially very little difference. Why? My right hon. Friend has explained the reason, Let us come down to the 31st December, 1919. The Government had borrowed substantially £320,000,000.

The CHANCELLOR of the EXCHEQUER (Sir Robert Horne): Not on 31st December, but in the financial year following the Armistice.

Mr. ASQUITH: The right hon. Gentleman took the date of 31st December?

Sir R. HORNE: I do not wish confusion to arise as to the date. In the year 1919–20, £320,000,000 were borrowed by the Government, and to that extent the debt was increased.

Mr. ASQUITH: I do not want to dispute about dates. The increase in the indebtedness of the country, says the right hon. Gentleman, between 31st March, 1919, and 31st March. 1920, was 320,000,000.

Sir R. HORNEindicated assent.

Mr. ASQUITH: It is that £320,000,000 only that has since been wiped out?or claimed to be wiped out, as I shall endeavour to show in a moment. I am very glad there is agreement about the actual facts. The right hon. Gentleman advanced various reasons why this admitted addition had been made to the debt in the financial year after the conclusion of the War. There were the necessary expenses incurred by demobilisation of the Army, removal of bodies of troops from place to place., etc. But that does not account for it, except I agree, in part. It was largely due, and substantially due, to adventures undertaken by the Government, costly adventures, futile adventures, adventures which have since been abandoned, in Russia, Iraq, Persia and elsewhere. It was really a renewal of borrowing for War purposes. The whole claim now made is that this addition to the enormous debt in the 12 months following 31st March, 1919, has now, at last, been wiped out. That is all.
There is another question on which our information is still defective. How much of that alleged reduction is due solely to the realisation of capital assets? I hope the Chancellor of the Exchequer will give us a report or return, something intelligible; figures which will show what were the capital assets, I mean war assets, in hand on 31st March, 1919, and how much have been realised year by year in the three years following; how much of what has been realised has gone in the form of Appropriations-in-Aid, and what at this moment is the balance left? I have here the statements made by the Chancellor of the Exchequer during those three years. I take the Budget statement of 1919. This, I think, was a Budget of the Lord Privy Seal. A very remarkable statement it is. The then Chancellor said:
As regards the £200,000,000 which I have taken as the probable receipts from Vote of Credit assets this year, this figure, of course, does not represent the total amount of these assets nor even the total amount expected to he realised in the present year. It is the amount of cash which we hope will be paid into the Exchequer.
Then the right hon. Gentleman goes on:
I will give the figures of the Appropriations-in-Aid. In aid of the Ministry of Munitions, £140,000,000; in aid of the Ministry of Shipping, £50,000,000; of the War Office, £50,000,000; of the Admiralty. £14.000,000; a total of £254,000,000, making, with the £200,000,000 which I expect to receive into the Exchequer, a total for the year of £454,000,000.' ߞ[OFFICIAL REPORT, 30th April, 1919; col. 182, Vol. 115.]
That was in the first year. Let me go on to read further from my right hon. Friend's statement:
Even that does not exhaust the amount of the credit which we expect to realise. I put the total value of these assets outstanding on 31st March last at approximately £800,066,000.
Yes. But he is going to realize £454,000,000 in the following financial year.
There will, therefore, be a further sum to come in in future years. The £200,000,000 estimated for this year is necessarily a provisional figure."ߞ[OFFICIAL REPORT, 30th April, 1919; col. 183, Vol. 115.]
That was the statement in 1919. The House will see that the amount of £454,000,000 was out of the estimated total of £800,000,000. We next come to 1920. The right hon. Gentleman was
still Chancellor of the Exchequer. He then said, in his Budget statement:
Vote of Credit realisations show an increase of £51.,300,000 on the original Estimate, mainly owing to unexpectedly large receipts from the Ministry of Shipping and the Ministry of Munitions."ߞ[OFFICIAL REPORT, 19th April, 1920; col. 72, Vol. 128.]
If you add the £454,000,000, that is over £500,000,000 received. Now we come to the next year, 1921:
Of other items I need mention only the special miscellaneous receipts. They were about £14,000,000 below the Estimate of £302,000,000, and again that decrease may be accounted for by the depression and the lower prices at which realisation could be effected."ߞ[OFFICIAL REPORT, 25th April, 1921; col. 69, Vol. 141.]
That gives us £288,000,000. I add these three figures together, £454,000,000 £51,000,000 and £288,000,000, and they come to £793,000,000. I really do not know, and I cannot yet gather from the statement of the present Chancellor of the Exchequer what amount he anticipates to receive by realisations in the current financial year.

Sir R. HORNE: Altogether, about £90,000,000 of Miscellaneous Receipts.

Mr. ASQUITH: That is a totally different thing. I am really asking for an explanation. Let me tell the right hon. Gentleman the predicament I am in. You have £90,750,000 Miscellaneous Receipts. A great many of these are not in any sense derived from realisations of War assets. Let me come to the items given by my right hon. Friend. He says that the interest on Treasury Notes, and Disposal Commission receipts will be £42,000,000.

Sir R. HORNE: Just about.

Mr. ASQUITH: And the items include: Ministry of Shipping receipts, £29,000,000, and Ministry of Food (Sugar and Wheat Commission), £19,000,000.

Sir R. HORNE: Is the right hon. Gentleman referring to the figures realised for last year and the figures which were last given? The figure for this year is a different one.

Mr. ASQUITH: They are last year's figures. I agree that they are not all in the same category, and we should like to know what is anticipated for this
year. Before we enter the Committee stage, I suggest it is very desirable that we should have these figures in a special Paper, because the House is very much in the dark with regard to them. I may be wrong by £100,000,000, and I do not know, but as far as I can make out from admitted items, there is something approaching a total value of these stores amounting to £800,000,000, which have been realised.

Mr. CHAMBERLAIN (Leader of the House): And I was told that I was foolish for expecting that amount.

Mr. ASQUITH: It was a very good Estimate. But I want to know how much is still outstanding. At any rate, £800,000,000 is a large figure?I do not care whether it is taken in comparison with the 31st March or the 31st December, 1919. I cannot see how you can say that you have reduced Debt when the facts disclose that you have really been selling capital assets. You have really been treating as revenue what should he treated as the sale of capital assets. I want the Chancellor of the Exchequer to tell us what claim he actually makes in the way of reduction in view of those figures. Will the right hon. Gentleman consent to give us a return showing for each of the three financial years, 1919. 1920, 1921, in detail the amount which has been realised in each of those years, and the amount which he hopes to realise in the future from the sale of capital assets. My hon. Friend the Member for Greenock (Sir G. Collins), who is an authority on these matters, says it really means something like 6d. on the Income Tax, if you include the interest on these realisations and work it out in terms of Income Tax. In reply to those who jeer and gibe at myself and the Prime Minister for tinkering with the Sinking Fund, I say that that is not a very effective retort. When did we borrow money for social reforms? I hope the Chancellor of the Exchequer will let us know what he has to say on these points.

Sir R. HORNE: I have no complaint at all to make in regard to the tone of my right hon. Friend's speech, nor of the question which he has put to me with regard to certain figures which appear in the Budget statement. I would like to say at once that I am prepared to
give the right hon. Gentleman the type of return which he desires, but he must bear certain things in mind. It is perfectly true that in the first year after the Armistice there was a considerable increase in the debt of this country by a figure amounting to about £320,000,000 sterling That was due, in the main, to War charges. I do not think that my right hon. Friend would suggest, and I am certain that he could not reasonably suggest, that the War could have been brought to an end on Armistice day, and that the charges for the succeeding years should be peace-time charges. For some time after the Armistice we had an army running to millions of men. What were we to do with them? Were we to pay them off and bring them home, or leave them where they were? I am sure my right hon. Friend would not suggest anything of the kind.
An enormous expense was incurred first of all in disbanding the Army, which had to be done slowly in order to allow the men time to be absorbed on their return to civil life. Those with long memories will recollect the immense difficulties with which we were faced at that time. There were great difficulties with regard to transport. The initial difficulty was not being able to bring them home rapidly enough in order to save the great expense we were incurring. That accounts for the borrowing which was forced upon the Government during that year. My right hon. Friend says there were other items which he regards as unnecessary. He says that we were engaged in adventures in many parts of the world and he especially mentioned Russia.
Let me recall the state of things in Russia. We had a force at Murmansk, and we could not bring it away at once. Does my right hon. Friend suggest that we should have left that force there without sending out any force to save these men? If he does not suggest that then his argument is not well justified. No doubt there were other instances in Russia, and I have no difficulty whatever about them. We had Allies in Russia. The forces of Russia had been used as allies for Britain, France and Italy in the struggle in which we were all mutually engaged. A large body of people in Russia had supported us against the German invasion and were we to leave these forces at the mercy of
the Bolshevist Government? If not, then the expense which we incurred during that period was undoubtedly justified. You may say that a point of time arose at which a different policy should have been pursued, but I say that no party in the State would have supported us at that time if we had precipitately withdrawn every man we had in Russia and left those who had fought with us so gallantly at the mercy of their enemies.
My right hon. Friend the Member for Fife has criticised the use we have made of the money realised from War assets. I think we can all appreciate the argument for treating these as capital account rather than for revenue account. My right hon. Friend knows very well that the accounts of the nation are not kept as you would keep the accounts of an ordinary trading firm. [HON. MEMBERS: "Hear, hear!"] Believe me, it is impossible to treat the Budget of the nation as you would treat the budget of an ordinary trading firm. What I say is that if you are going to treat the money realised from these capital assets as capital, then equally you should put into a special account all the expenditure incurred in connection with the winding up of the War, and the enormous burdens we are now bearing as purely war charges.
A great many claims for compensation had to be satisfied owing to the cancellation of contracts, many of them being made whilst my right hon. Friend was Prime Minister, and all these claims had to be met. There were innumerable cases of that kind, and all these accounts are not yet cleared up. We have had to pay considerable sums, even during the present year, to the railway companies under contracts made by the President of the Board of Trade who, at the beginning of the War, was serving under the right hon. Gentleman opposite. These had still to be satisfied, and when the account comes to be dealt with it is perfectly plain that you must set one side of the account against the other, and it is quite reasonable to say that in considering the expenditure caused by the War, you are entitled to take into account the amount realised by the sale of the assets which have come down to us from the War.
6.0 p.m.
I turn now to another point which my right hon. Friend made in common with the hon. and gallant Gentleman the Mem-
ber for Newcastle-under-Lyme (Colonel Wedgwood) who spoke for the Labour party. They profess to deprecate the suspension of the sinking fund and indicated that they saw evidence that we were really borrowing in order to meet our current expenditure. I am not sure whether the right hon. Gentleman opposite still maintains that point, but I think it is perfectly plain that what we are doing does not partake of that character, because although we are not paying off any debt, we are not increasing our debt. After the speech of the right hon. Gentleman I call him as a witness in favour of that course. He does not profess to say that you must always pay off debt. He does not say that you must always pay off the same amount of debt. He has recited his own personal experience in a time of prolific revenue and good trade and peace, when he was able to devote large sums in each year to paying off debt. By Statute he fixed the amount at a higher figure than it had ever previously attained. Having fixed it at that figure he does not profess that he maintained it. You have to deal with your debts, he said, according to your capacity at the appointed time in the circumstances as you find them. He found he required certain sums of money for social reform. He also wanted some of the money for buying shares in the Anglo-Persian Oil Company, so he suspended this statutory obligation in order to meet those charges.

Mr. ASQUITH: I raised the fund for the reduction of debt to £29,500,000, and I said before I left the office of Chancellor of the Exchequer that in the condition of the country it was no longer necessary to continue repaying debt on that scale, and the amount repaid was reduced to £10,000,000 a year.

Sir R. HORNE: Yes, my right hon. Friend was lucky enough and happy enough to have a large sum of money at his command, but he did not go on paying at the rate he had previously been paying. He did not provide for his social reforms out of current revenue, but he suspended his Sinking Fund, or rather he lessened it, in order to meet the obligations he was incurring in connection with his new social reforms. Is it not perfectly plain to the House that the right hon. Gentleman did on that occasion just what we are doing to-day? We are deal-
ing with circumstances as we find them. We are paying off as much Debt as we can pay. It is true that in the existing circumstances we are not in a position to pay off any at the present time except by increasing the burdens on the country to an extent which the country could not bear. If my right hon. Friend had taken the purist attitude during the existence of his own Government which he professes to take to-day, he would have said: "We must raise the payment of Debt to a higher figure; let us maintain it at that figure, and take out of the taxation of the country sufficient sums of money to pay for our social reforms." But he did not choose to take that course. He said, on the contrary: "You must deal with circumstances as you find them, and you must not impose greater burdens on the country by way of taxation than it can bear." We find ourselves to-day in a condition unparalleled with anything that obtained during the right hon. Gentleman's experience. He never had a year, either as Chancellor of the Exchequer or as Prime Minister, in which he had to meet such obligations as those with which we are faced to-day. It is easy to take these otiose views of finance when you are in a particularly happy position. It is easy to come here and criticise us in this way when he was under no obligation to find money to meet the national burdens such as we had to meet.

Mr. ASQUITH: I was gratuitously and wantonly charged with tinkering with the Sinking Fund, and that is all I was replying to.

Sir R. HORNE: And my riposte was to the attack the right hon. Gentleman made on me, for suspending the Sinking Fund. I think at present we may cry quits on that.

Mr. ASQUITH: Not at all.

Sir R. HORNE: I think I have dealt with all the points raised by the right hon. Gentleman. I turn now to the arguments of the hon. and gallant Member for Newcastle-under-Lyme who spoke for the Labour party and who also took his stand upon the purist doctrine of continuing the plan of paying off debt without regard to the conditions of the country's finance. I do not know at what
figure the hon. and gallant Member would put the amount which ought to be paid off from year to year. Is it to vary according to the, country's circumstances, or is it to be some stereotyped figure which the hon. Gentleman would fix% It seems to me his doctrine is hopelessly impracticable. My hon. and gallant Friend argued first of all on a basis of theory, but then unfortunately for himself he drew a picture of what he thought would be the result of the suggested course of action. He said we would find ourselves in the position of having to pay a larger interest for our Treasury Bills and that we would find it very much more difficult to raise the money we required for public debt. It was very unfortunate for the hon. and gallant Gentleman that he had to argue on facts instead of theories. My Budget Speech was made on the 1st May. What has been our experience since then with regard to the prices of Treasury Bills which have been issued? They have become cheaper, therefore there is no foundation for the theory which the hon. and gallant Gentleman has advanced. Some people who took a very apprehensive view told us also that the exchange value of the £ sterling would be depreciated by this proposal. Again the facts absolutely refute the theory because the value of the £ sterling has in the same period increased.

Colonel WEDGWOOD: Then why not borrow more money? Why not increase your national debt?

Sir R. HORNE: The question is not to be solved in that way. The fact is that the market takes into account the circumstances in which the country is, and it bases its view of our credit upon the general soundness of our financial position. I venture to think that the position in which we are to-day has in no way been impaired by the proposals which I made in the Budget speech on the 1st May. My hon. and gallant Friend says we have clone nothing for anybody but well-to-do men in this country. He suggested that the reduction of the Income Tax was entirely a modification of the burdens of the rich, and that we ought, indeed, to have applied whatever money we could save by this method of suspending the Sinking Fund to the remission of duties on tea and sugar. We have done something for tea, coffee, cocoa and chicory, all of which affect
most of the households in this land. It is entirely a fallacy to suppose that all Income Tax payers are rich men. A single man with an income exceeding £135 pays Income Tax. A married couple with no children, whose income exceeds £225, pay Income Tax. Would you call these wealthy people? A very large number of the Income Tax payers of the country to-day are, in fact, poor men, who find the struggle for existence almost. more than they can stand. It is absurd to say that even in the class of people directly affected one is dealing only with the wealthy or well-to-do in this matter. The proposition is very much bigger than that.
Who were the people who mainly ask me to reduce the Income Tax if I wanted to benefit the greatest number of people in this country? They were the employers of labour in this country. They were the men who to-day find themselves unable to offer employment to the masses of people they used to employ. They said that if I wanted to do anything for industry or trade it could best be done by taking something off the Income Tax and giving them more financial facilities by means of which they could offer more employment to the people. I do not imagine there are many parts of the House in which that argument is contested. I have already referred to a speech, which I read many years ago, made by the right. hon. Member for Paisley on the untoward and ill-effect of a high Income Tax on trade and industry, and I therefore may cite the right hon. Gentleman as a. witness in favour of the proposition I have advanced. I could cite speeches from other hon. and right hon. Members beside and behind the right hon. Gentleman on the same lines and to the same effect. The real truth is that, although we cannot say that taking Is. off the Income Tax will have a very great effect—it is too much to say that I admit—on the trade of this country, at least it makes a start in the right direction, and I am perfectly certain it has given hope to many people, who now trust that we have, perhaps, turned the corner of the worst trade depression the world has ever known.
The hon. and gallant Gentleman went on to attack individual items of the aid which he said was given to particular interests in this country. He spoke of the case of the railway companies, which he described as receiving gifts from the
present Government. He said that grants in aid were given to them without cause or reason, except that this nefarious Government wanted to help what he described as its own friends. I do not. believe I have a friend among the railway companies to-day. I have only to recall the recollection of the right hon. Baronet the Member for the City of London (Sir F. Banbury) to a meeting at which the railway directors came to settle accounts with me. I do not believe I had a single friend in that room at the end of the meeting, because, in point of fact, it was my duty to resist the claim that was made, and in the end it was settled for something like about one-half of what the railway companies said they could actually exhibit accounts for. That was not a gift or a grant-in-aid. It. was an absolute obligation under which the country lay as the result of a contract made by the President of the Board of Trade in the Government of the right hon. Gentleman opposite. Were we to disavow these contracts? I think my hon. and gallant Friend should revise his language.

Colonel WEDGWOOD: I think the right hon. Gentleman really ought to read the Colwyn Report.

Sir R. HORNE: I am sure there is nothing in that Report antagonistic to what I am putting before the House. I do not think any member of the Colwyn Committee would disagree with the compromise which I succeeded in making with the railway companies. I see a member of that Committee here this afternoon, and I venture to suggest that the settlement which was made by the Government was regarded by him and most of his colleagues as a very fair one.

Sir FREDERICK BANBURY: May I point out that the Colwyn Report said that, if the railway companies went to law, they might get something like £160,000,000, whereas the Government allowed, I think. L60,000,000—I do not remember the exact figures.

Sir R. HORNE: Yes, that is so. I will only say, before I leave the question of the railway companies, that some people may have been fortunate enough to gain by the advance in the value of railway companies' stocks, but they had an opportunity which was abnormal, be-
cause, undoubtedly, stocks were unduly depressed by the apprehensions which railway stockholders felt as to what was going to take place—depressed, not upon their merits, but upon these apprehensions. The hon. and gallant Gentleman should remember one of the provisions of the new railway legislation, which is, that, in so far as the railway companies make any revenue in excess of their revenue of 1913, four-fifths of it has to be given back in reduction of the freight rates, and only one-fifth of it can go to the shareholders. I do not think the hon. and gallant Gentleman will say, after that, that the Government has been any particular friend to the railway stockholder. The hon. and gallant Gentleman had, of course, his criticism of the proposals with regard to agricultural land and also to amenity land. I have seldom listened to any speech of the hon. and gallant Gentleman since I entered this House in which he did not. at some stage of his argument produce an illustration from the inequalities of the land system of this country, and the definition which to-day he gave us in regard to wealth reminded one of some of the old controversies in which he took such a prominent part. I will only say in defence of the proposals which the Government are making that, if the hon. and gallant Gentleman would take the trouble, as I have done, to investigate the accounts of landed estates and the miserable pittance which is derived from them in these days, he would come very readily to the conclusion that we have been none too generous in the provisions which are made in the present Finance Bill to meet the emergency in which they find themselves.
Then the hon. and gallant Gentleman referred to the one remedy which the Labour party proposed for all our financial ills—he suggested that we ought to indulge in the luxury of a capital levy. I have always found the difficulty about a capital levy to be that nobody can explain to me how it is going to produce any money. Immediately you begin to impose such a levy, all the capital on which you would impose it begins to disappear. I do not mean that it disappears bodily out of this country, but the value disappears. The capital is so depreciated that, instead of getting something by the levy, you really decrease the wealth of
the country, as well as decreasing the confidence on which all wealth depends. The best illustration I can find of what will happen under a capital levy is that which one finds in the classics with regard to the case of Tantalus, who was surrounded by water which he wanted to drink, but which he never could reach.

Mr. A. M. SAMUEL: You had it in the Excess Profits Duty even more closely than that.

Sir R. HORNE: The case of Tantalus would be absolutely reproduced in the case of any Chancellor of the Exchequer who sought to impose a capital levy. The capital he sought to reach would always disappear as he attempted to snatch it. The hon. and gallant Gentleman has a plan of his own, but he was met by a query from the hon. Member for Farnham (Mr. A. M. Samuel) as to how he was going to work it out, since most of the capital of this country is entirely immobile—is not represented by cash, but by factories, buildings of every sort and description, equipment and plant. How was the hon. and gallant Gentleman going to work his capital levy? His reply was that the stock of those companies must be watered, and the Government should take a share in each of them. I do not think that anything harsher about a capital levy has ever been said than that. It requires, as a result of its operation, that the Government should become a universal shareholder in companies with watered stock; and there, I think, I can leave the criticism of the hon. and gallant Gentleman. I think I have given all the information for which the right hon. Gentleman asked me as fully as I can, and I do not think that, upon any of the grounds which have been suggested by the speakers who have preceded me, the House will feel inclined to refuse the Bill a Second Reading.

Mr. LAMBERT: So far as I am concerned, the real crux of the situation in connection with this Budget is that it provides for far too much expenditure. The expenditure of the country has got to come down, and then taxation will come down. I should have liked the Chancellor of the Exchequer to give us some idea of how he proposes to effect the economies he promised in his Budget speech. That is the real crux of the situation. The country to-day is taxed far more heavily than it can bear. I do
not care what party is in power; the country cannot go on bearing this enormous load of taxation. I do not, however, blame the Chancellor of the Exchequer to the extent that some of his critics do. I really believe that he is a frugal Scotsman in questions of finance. He appointed the Geddes Committee, and that was a very admirable piece of work, although it was not good for the reputation of the Government. He has given us information—I gratefully acknowledge it—on all the subjects about which we have asked. He finds, however, that the road of the economist is a very stony one, and he gets bleeding feet sometimes; but in reality we are suffering to-day from the orgy of extravagance of 1918 and 1919. The Government then went into every kind of mad experiment. Anything that would cost money, any fad that anyone got hold of, they translated into legislation, and consequent expenditure.

Mr. A. M. SAMUEL: That means the Labour party.

Mr. LAMBERT: That is your quarrel with your own Government. The Budget of the right hon. Gentleman the Lord Privy Seal, when he put on £200,000,000 of new taxation after the War, was a perfectly unjustifiable proceeding, and now we are up against the fact that it is very difficult to enforce economy because there are such an enormous number of the population who are receiving State aid. There are so many State-paid workers. The dockyard Members used to be the people who came here to bribe their constituents at the taxpayer's expense. Now the number is doubled and trebled, or even more. I hold that those of us who have some economical notions should endeavour to convince the workers of the country that it is to their interest to curtail Government expenditure. I am certain that we shall never get on until we we convince the hon. and gallant Gentleman who moved this Amendment, and until we convince others of his party that a reduction of Government expenditure is in the best interests of the workers of the country. I must say that I do not agree with my hon. and gallant Friend when he suggests that a reduction of the Income Tax will not help employment. I believe it will.

Colonel WEDGWOOD: I said that it would not help employment so much as a reduction of debt.

Mr. LAMBERT: At any rate we must remember, and I hope my hon. and gallant Friend will remember, that no employer of labour can increase his enterprise, can increase employment, if the tax collector comes along and takes the capital which is necessary for that purpose. To-day any small man in business, if he desires to make his business a success, puts back part of his profits and those profits give employment to labour, besides producing some useful commodity. But if the tax collector comes along, then, undoubtedly, that employment cannot be given, and I say that the whole industry of the country to-day is depressed by the enormous taxation of from 5s. to 10s. in the X. If a man succeeds, he gets 15s.; if he fails, he loses £1. That is a great check upon enterprise, and we have to kill that school of thought in this country which believes that high taxes are an advantage to industry or to the country. It is very like those economists—I do not like to call them muddle-headed—who believe that it would be a ruin for us to receive reparations. We have had the most dangerous Government of all—a Government of good intentions. The Prime Minister is sincere; he has good intentions; but he lands us into this morass of State-aided philanthropy. The State to-day is paying for what individuals ought to do. We have got to get back to the idea that individuals have to do more and the State less, because whatever the State does is badly done. The nation consists of individuals. The individual, if he be prudent, forecasts his income and adapts his expenditure to it. The State, on the contrary, forecasts its expenditure and then taxes us poor people who have no voice in the matter except a vote occasionally. My hon. and gallant Friend advocated a capital levy. is he quite certain what the result of a capital levy will be? After all, if a man pays from 5s. to 10s. in the in Income Tax, that is a pretty heavy capital levy.

Colonel WEDGWOOD: Reduce it.

Mr. LAMBERT: That is a matter of economics and finance, but I would point out to my hon. and gallant Friend that compelling the taxpayer to pay from 5s.
to 10s. in the £ has a very considerable effect upon capital. I agree with my hon. and gallant Friend absolutely about the reduction of debt, but, unfortunately, to-day we have changed over from reducing debt, and now, as my right hon. Friend the Member for Paisley (Mr. Asquith) said, we are re-borrowing to pay off debt. I do, however, differ from my hon. and gallant Friend when he talks about a gift to the landed interest. Let me tell him that there is land to-day which is not being cultivated because of high rates and taxes, and the higher the rates and taxes, the less land will he cultivated. I must say that I always regarded the Genoa Conference as more or less of a will-of-the-wisp, but one of the results it did produce was a very admirable Memorandum, issued by the Economic Section, and that Section was presided over by a gentleman called Sir Robert Horne. Unfortunately, we do not seem to know him in this country. One of the principles which it laid down was, that the most important reform of all must be the balancing of the annual expenditure of the State without the creation of fresh credits not represented by new assets. He then says:
The balancing of the Budget requires adequate taxation. If Government expenditure is so high as to drive taxation to a point beyond what can he paid out of the income of the country, that taxation itself may lead to inflation. Reduction of Government expenditure is the true remedy.
That is Sir Robert Horne at Genoa. We do not quite recognise the Chancellor of the Exchequer here, because he to-day is budgetting for a deficit. He will have to provide for a reduction in revenue of £1,000,000 less next year for the Post Office, £20,000,000 less receipts from Income Tax, and £500,000 less receipts on tea. That means that next year the revenue derived from Income Tax, Post Office, and tea will be £21,500,000 a year less than this year. This year he has War stores, £90,000,000, and War expenditure, £60,000,000. That is a balance in his favour of £30,000,000. 230,000,000 plus £21,000,000 is £51,000,000, which he will not have next year. Then he will have to pay another £25,000,000 to America, which he has not got in his Estimates of this year. That is £76,000,000 that the Budget will have to bear more next year than it does this. Does anyone believe the Income Tax and
the other Estimates the right hon. Gentleman has made will come up to our expectation, when you have one very bad year to come in instead of one good year? Therefore, I say, the right hon. Gentleman is budgetting for a deficit.

Sir R. HORNE: Next year.

Mr. LAMBERT: There is no political leaflet, but the view of the London City and Midland Bank. It is said here that by the policy of the Chancellor of the Exchequer,
the policy of deflation, has been definitely abandoned. It is too early yet to form an opinion but it may be that a period of inflation is ahead of us.
That is what I think the right hon. Gentleman is doing. He is not going to balance his Budget next year unless he imposes fresh taxation. Therefore you are going to have an increase in the cost of living, which will mean an increase in the cost of production. How will that aid trade recovery? I think the Chancellor should have looked ahead to next year as a sound financier and should have carried out the principles laid down by Sir Robert Horne at Genoa. He talked about the railways and said how strict he had been. I do not quite agree with him. He is going to pay the railways this year £33,000,000. Does he understand how much trade and agriculture to-day are harassed and prevented from recovering by high railway rates? The Railways Act of last year was one of the wickedest Acts ever passed in this House.

Colonel WEDGWOOD: There is a further gift this year.

Mr. LAMBERT: I am not talking about gifts. I say the Act. I have figures which show that great iron companies are complaining of high railway rates which prevent them from meeting foreign competition. Until railway rates come down, we cannot recover as we should. Then, in justification of what I have been saying about high taxes, let us remember the rates, too. According to a Return issued by the Government, the rates were £71,000,000 in 1914, and they are now £173,000,000. All this is hampering industry. We have to get it into the heads of the people that low rates and low taxation mean, as Gladstone once said, that the money will fructify in the pockets of the people.
Let me turn to the expenditure of the country this year, apart from all War charges, as compared with what it was before the War. The expenditure before the War was £207,006,000, but there was a. compulsory Sinking Fund then of, I, think, £7,000,000. That is £200,000,000. The right hon. Gentleman this year has to budget for £335,000,000. He has 290,000,000 of War pensions and £60,000,000 of War charges. That is £485,000,000. His total Budget is £910,000,000, so he is spending this year, apart from debt incurred by the War, £425,000,000. With this enormous load of debt., we cannot afford it. The taxable, capacity of the country was estimated by the general manager of Lloyd's Bank at 2600,000,000. You are asking it to bear just 50 per cent. more. I still say that we are taxed too high. Let us take what the right hon. Gentleman has done with regard to the Geddes Committee. At Sheffield on 10th May, Sir Eric Geddes stated that:
The Chancellor of the Exchequer asked us for £100,000,000 of savings. We recommended £100,000,000. The Chancellor of the Exchequer has given effect to £52,000,000.

Sir R. HORNE: There will be more next year upon the same savings.

Mr. LAMBERT: I hope so, but hope deferred maketh the heart sick, and hope has been deferred so many times with regard to economy. The House of Commons has to realise that you cannot have economies unless you are prepared to face unpopularity. We all have to face unpopularity. We are told we have no Army, the Navy is starved and the Air Force is good for nothing, and yet for all that we are spending, according to a return which the right hon. Gentleman has issued—and I am grateful to him for issuing these returns—on the fighting forces £167,000,000 a year as against £86,000,000 before the War. There is something wrong somewhere. Let me deal with one or two of the Departments and how they have mounted up since the War. This is extracted from a Civil Service return. Before the War the Board of Trade cost £465,000. Now it has had put on to it various excrescences like the Department of Overseas Trade, the Mines Department and some other things which were the outcome of that orgy of expenditure and faddism which we had two or three years ago. The Board of Trade is now spending 22,840,000. I am certain we
are not getting value for it. The Forestry Commission is another thing which was started. I see we spent no less than £200,000 last year. Now it is reduced to £20,000. I suggest that it should be cut nut altogether. Get rid of it. it is really no good. The Ministry of Agriculture spent £254,000 before the War. To-day it spends £1,834,000. I know as an agriculturalist that we are not getting value for that money. Let us cut down these swollen Departments. The trouble is that when you have these clerks they must lee doing something, and when they are doing something they are spending the nation's money. I want to get rid of a good many of them. Take the Office of the Secretary for Scotland.

Mr. SPEAKER: It is not in Order on the Finance Bill to go into any Departmental details of expenditure. That is the function of the Committee of Supply. It is quite in Order to deal with the balance-sheet on general principles.

Mr. LAMBERT: I am talking really from the point of view of general principles. The office of the Secretary for Scotland has gone from £16,000 to 2119,000 a year. I will not pursue that line of argument any further, but it is one which, I think, we must consider. In the case of the Ministry of Health the figures are even more striking. I ask the right hon. Gentleman to get the House of Commons with him, to appeal to the House of Commons to bring down this new bureaucracy. I believe any Minister to-day who made a stand against officialism and bureaucracy would be supported by the country. There will be no surrender in Whitehall or in any of the Government Departments. They are entrenched there in barbed wire entanglements and dug-outs. But we have got to bring clown this enormous amount of public expenditure if the country is to live. There were statesmen of the past—Mr. Gladstone, Lord Goschen, Sir Michael Hicks-Beach—who, after all, were not fools. They were frugal in Government expenditure, and I ask that, we should go back to those old principles which I am not ashamed to advocate—the Liberal principle of fostering for the individual liberty and economy in the public service.

Sir R. ADKINS: In common, I should think, with all hon. Members I cordially agree with much that has fallen from my
right hon. Friend, and one welcomes any opportunity of hearing or repeating the protest which requires to be made as often as possible against the undue development of Governmental activities in the last few years. Certain kinds of expenditure can never be seriously diminished. Certain national developments must be financed if the country is to remain healthy and alive. But the habit of setting people to watch other people, the habit of multiplying inspectors, the habit of multiplying returns, the habit of inquiring into everything to see whether it is growing or not —all that leads to far greater expenditure of money than the results which are obtained from it. There is another side to the present very grave financial position. The limits of taxation are practically reached and whether we are supporting the Motion to reject the Bill or whether we are voting for the Budget because we believe it to be necessary, we know that taxes are pressing with undue hardship on every kind of person, some people finding one more intolerable to bear, the others finding another, and one realises at the same time that with the demands made upon the country, with the enormous debt, which this year will remain at its existing amount, the Chancellor of the Exchequer or anyone who took his place would be bound to levy taxation not substantially different in amount from that under which the country is groaning at present. Therefore one asks what taxes are there which can be modified, and what taxes are there, particularly taxes bringing in but small returns, as to which a natural and inevitable limitation exists now, but which may easily become a public danger, which can be alleviated and allayed. Let me give a few illustrations. If you take 1s. off the Income Tax, and if you make the reduction in the Tea Duty proposed in this Budget, you cannot without disturbing the whole balance of the finance of the year diminish by any considerable amount such things as Beer Duty and Tobacco Duty. That these are arousing widespread irritation, annoyance and discontent is a fact which all of us know, a fact which no one can afford to disregard, and a fact which I hope will lead the Chancellor of the Exchequer to give, if he possibly can, in connection with the debates on this Budget, some idea of the way in which
he is looking and some adumbration of, if not immediate, at any rate, not long delayed relief.
There is another tax of which we have heard so much, owing to the admirable machine of protest which has been organised. I refer to the cinema tax. It is perfectly right that taxation should be levied on amusements. If you merely put taxation on necessaries and you do not have taxation on amusements, the obvious harm to the country requires no exposition. At the same time, it is a fact that the incidence of the cinema tax is not a fair incidence as between those who go to the less expensive amusements, and those who go to the higher. When you are dealing with taxes on amusements, it is, surely, of the greatest consequence so to apply them that those who can best afford to pay them should pay most, and it cannot be fairly said that the higher proportion should fall on those amusements which are sought by those with less resources, rather than on those who are in more easy circumstances. The cinema tax ought to be susceptible of such modifications as, without making any serious inroad on the receipts anticipated in the Budget, would relieve that perfectly genuine grievance.
The one tax on which I desire to speak with a little more detail is what is called the Club Tax. Taxes are so subtle in their incidence, and changes which are not foreseen by their authors so alter what comes about through them that no one can be surprised that the War and the enormous change in prices has brought about in regard to the Club Tax results that were never anticipated when it was levied originally 12 years ago, and results which are not in accord with the principle on which the tax was levied. I agreed with the principle of the tax when it was levied. It is a fact that clubs are in a certain sense in competition with licensed houses, and that there are sales of excisable liquors in clubs which it may well he argued should in some form or another pay a proper quota to the Exchequer in comparison with licensed duty paid by those licensees who sell excisable liquors. When the tax was first levied the returns were only about one-fifth of the returns from licence duty. You have the tax based on the amount of excisable liquors bought in the year, not on the amount sold, not on the membership of the club, not on the value at
the time the tax was first levied, and the effect of its being in that way is to work an injustice more sharply articulated, more obvious than any injustice which arises out of any tax to which we can refer.
The position has come to this, that the less value a person has for his purchase the more tax he has to pay on it. It is a perfectly ridiculous result, because the costs of excisable liquors bought by clubs are higher in consequence of the rise in price, even when the quantity is less, and the tax rises in proportion. Therefore, the less value a man has for his money the greater is the tax which the State extorts from him, or rather from his club. I appeal to the Financial Secretary to the Treasury and to the Chancellor of the Exchequer, seeing that the amount of revenue brought in by this tax is only £350,000, and that it has been brought in to a very large extent because of the unforeseen circumstances, and the unexpected conditions of the tax in that form and levied in that way, to consider whether it is worth the irritation and the sense of injustice which is felt amongst the members of the 10,000 clubs in this country. By all manner of means let there be a club tax, fairly proportioned as was this in the beginning for the object it is desired to achieve; but the fairness has gone out of its incidence, and the results are quite different from what was expected. It is causing practically universal irritation and dissatisfaction, and what it brings in, although far more than was intended at the beginning, is surely not worth the irritating circumstances attached.
I appeal to the Government that, in a time like this, when taxation is of necessity so high, the. inevitable irritation which this causes is not without elements of danger to the State, and while I appeal for consideration on the other matters to which I have referred, I appeal particularly in regard to this, and ask whether they cannot, having regard to the comparatively small financial resources involved, get rid of this very considerable and legitimate cause of irritation and sense of injustice, in the real interest or making the payment of taxation as little burdensome and as full of the sense of necessity and of justice as can be done at a period of such extreme difficulty as
that in which the House and the country finds itself.

Sir PHILIP SASSOON: This is not. a time when anybody by preference would make a suggestion which is likely to add to the burdens upon the Treasury, and if I do so I would ask the House to believe that it is in connection with a matter of very real and pressing urgency. I refer to the dispersal of our national art treasures, and their sale to foreign countries, and to the problem which confronts us of how to check the process before the nation suffers further irreparable loss. This subject was mentioned on a previous occasion by an hon. Member opposite, and I now invite the House to give it most sympathetic consideration and attention, because I do not think it is sufficiently realised how largely our national galleries and museums in London and in the provinces that are now open to the public exist for the benefit of the poorer sections of the population, or how largely they are frequented by people who have no other means of gratifying their love for rare and beautiful things.
To people who are rich enough to travel it may perhaps not matter so much whether a certain picture or statue is housed in London, Paris or New York, but to the poor man, who is yet riot so poor in spirit and intelligence or in the appreciation of beautiful things, it is a very real loss if a work of art is removed from a gallery where he may one day see it to a country which he may never hope to visit. Our national galleries and museums exist for those who have no chance of studying art elsewhere and who have no opportunities of widening their knowledge or experience by personal travel, study or research. They exist primarily for the poor, and I respectfully submit that it is part of the duty of this House to see that our national galleries and museums are as representative and as complete as possible. It is also part of the duty of this House to safeguard and preserve the nation's works of art which are still in this country and, although they may be in private hands, may still on fitting occasions be on view to the general public, and give immense pleasure to everybody who sees them.
The plea I am putting forward to the Treasury is not based on any particular
regard for the private individuals who may have to sell their pictures to-day. They may have their grievances and opinions against the system of taxation that enforces such sale, but those are not the opinions or the arguments I wish to urge upon the House at the present time. The people who sell their pictures get good prices for them. It is not from the individual point of view, but from the national point of view that I would like to urge this question upon the attention of the House. The whole community suffers, both rich and poor, when any work of art or genius is carried away from our midst to become an example and an inspiration to another people. The loss to our national culture is a most important point. The second argument is the purely financial one, namely, the loss which the nation suffers when national capital is realised and dispersed, for these works of art represent national capital. Both these points of view affect primarily, not the individual who is forced to sell, but the nation as a whole. The community as a whole is impoverished in a sense both morally and materially. It is a part of our civilisation that leaves us whenever one of these outstanding triumphs of human art and man's creative genius is carried away to another country.
I need only quote two facts in proof of what I say. So high a value has been put by the common consent of the statesmen and nations of Europe upon the national possession of these great art treasures, that by the Treaty of Versailles these works of art were given a position of international importance. My second fact is in itself an acknowledgment of the correctness of the view expressed in the Treaty of Versailles; I mean the enormous increase in the number of pepole who visit our great art galleries and museums, especially the poorer sections of the population. That is clearly shown by the increasing numbers of people—they are numbered in millions yearly—who visit our national and private galleries. It shows that art is now looked upon, not by the few but by the many, as a high educational force, as a moral inspiration, and as a wholesome source of recreation. A Noble Lord in another place, Lord Sudeley, recently called attention to the popularity of guide lectures in museums and galleries, and to the growing number of
people who find in them an absorbing interest, and who go to listen to them even after a hard day's work.
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My appeal is that even in the present year of financial stress the Government should take immediate steps to safeguard and preserve for the nation what is left of the unique art possessions in private hands. This plea is not dictated by any tenderness for the individual who is forced to sell his pictures, and who may very often be a comparatively rich man. It is put forward entirely because I am impressed with a profound sense of the irreparable loss which the nation has already sustained by the departure of so many works of art. That. is a loss which will be increased month by month, unless some action is taken to acquire for the nation those works of art which are now in private hands, and which are in danger of leaving the country. There is no time to be lost. Some hon. Members may remember that so far back as 1915 the committee of the trustees of the National Gallery, presided over by Lord Curzon, made a report on the same subject. They said that the exodus of old masters from this country was proceeding at a very terrible rate. A list was prepared which, though necessarily incomplete, showed that 500 pictures of outstanding merit, and all worthy to be retained as national possession, had in recent years left this country. The committee then predicted that in the course of the next quarter of a century, unless steps were taken to prevent it, this list would be doubled. Under pressure of events since 1915 the worst fears of the committee of that date have been more than realised. The exodus of old masters from private collections has been going on at an appalling rate, and masterpieces unique in the history of human art have left this country. This fact is known to everyone present, and it is equally clear that week by week this will go on unless some steps of a remedial character are taken by the nation.
I do not think the remedy would be a drastic one, when measured by the figures with which this House has become accustomed to deal when treating of the national finances. The Report of the Committee to which I have referred was conclusive on one point, and that was that whatever ameliorative measure might be adopted, there was only one cure for
the state of affairs that existed then and which prevails to a far worse degree today. That cure was that the Treasury should be empowered to make from time to time special grants for extraordinary emergencies to the National Gallery, so that the National Gallery might be able to acquire for the nation by purchase some few at least of the finer works still left in this country. The proposal involves no innovation or departure from precedent, for in past years, when the grant to the National Gallery was double what it is to-day, as much as £75,000 and £85,000 were given as extrordinary special grants. Larger sums will no doubt be required to-day, but these extraordinary emergencies, when works of art of outstanding merit are in danger of leaving our shores for ever, must necessarily be few. I do not suppose there are more than half a dozen or a dozen pictures in our private collections in England to-day which can, from every point of view, be considered national treasures, and which as such ought not to be allowed to leave the country. Such grants would not be entirely unprofitable expenditure, even from the purely financial point of view. There are few private owners of valuable art treasures to-day who would not be willing to sell to the nation, at a price substantially less than that they could easily get in the open market, so that the nation would get immediately more than the present full value of its money for the pictures, which are bound to increase in monetary worth from year to year. In this way national capital will be preserved o the nation; but far more important than that, objects which form an integral part of the culture and civilisation of our race, which bring pleasure to millions of people in these islands and inspire and uplift all who behold them, would be preserved for all time for the enjoyment and the benefit of our own people.

Captain MOREING: Unlike the hon. and gallant Gentleman the Member for Newcastle-under-Lyme (Colonel Wedgwood), who moved the rejection of this Bill, I desire to thank the Chancellor of the Exchequer for the relief he is giving agriculture in the Budget. The House does not need to be reminded that most of the tenant farmers of this country are suffering to-day from an almost overwhelming burden of imperial taxation and local rates. I am very much afraid that many of them, especially those who
have purchased their farms, are in for very bad times during the next few years, and the relief granted in the Budget will come to them as a message of encouragement and hope. It will show them that the Chancellor of the Exchequer, in spite of his difficulty and of the many claims upon his consideration, has been able to think of them and to afford them some assistance. I know that this does not meet with the approval of hon. Members of the Labour party, and I expect some of the financial purists, if I may call them so—I hardly know how to describe that section of the Liberal party which is in opposition to the Prime Minister—will maintain that farmers should be assessed, like everyone else, under Schedule D. I would like to remind the House that most farmers are unacquainted with systems of bookkeeping, and that of all the forms of accounts agricultural accounts are probably the most complicated.
I wish to pass from a point of praise to one a consideration. I should have liked to see in this Finance Bill some further reform of Income Tax procedure. It is rather striking that, although the importance of the Income Tax has enormously increased, and though it is now the mainstay and principal support of our financial system, there has been no alteration in the method of assessment and collection of the tax, at least on paper, since 1842, and I am not at all sure that it has been materially changed since 1798, when it was first introduced. That may be a great tribute to the essential conservatism of the British character, but I assert that the tax could not now be speedily and economically collected unless, in effect, there had been a very considerable departure from the law. I am not going very far wide of the actual state of affairs when I say that at least two-thirds, possibly four-fifths, of the tax are collected under procedure which, if not actually illegal, is at any rate a very great, departure from the methods laid down in the Act. We all know what the legal procedure is, and how it is supposed to be put into effect. I assert, however, that the hulk of the tax is agreed direct between the taxpayer and the Assessor of Taxes, and the nominal assessment by the Commissioners of Taxes is really only adding delay and expense. I agree that we should not do anything which would hamper the right of the
public to appeal to the Commissioners, but I would urge the Financial Secretary to the Treasury to take these points into consideration and to see whether it will not be possible to render the assessment and collection of the tax more in consonance with the actual facts as they are to-day. The result would be more speedy working, greater satisfaction to the taxpayer, and a greater addition to the revenue.

Mr. HOLMES: I wish to address the House on a topic which has not been referred to during the Budget Debate nor to-day, that of the Corporation Profits Tax. I wish to ask the Chancellor of the Exchequer whether he thinks it worth while to continue that tax? The House will remember that it was introduced two years ago, in the Budget of 1920. The Lord Privy Seal, who was then Chancellor of the Exchequer, said he believed it would be a substitute for the Excess Profits Duty. There can be no comparison between the two taxes, and the Corporation Profits Tax can never be a substitute for the Excess Profits Duty. In the first place, the Corporation Profits Tax is only a limited tax, whereas the Excess Profits Duty falls on all trades and businesses, and the yield of these two taxes, so far as one is a substitute for the other, is so different. The Excess Profits Duty brought in £200,000,000 or £300,000,000 a year, and the Corporation Profits Tax not more than £20,000,000. In justifying the Corporation Profits Tax in 1920 the Chancellor of the Exchequer said:
Partners in a private partnership pay Super-tax not merely on the profits which they divide, but also on the undivided profits which they place to reserve. No such charge falls on the undivided profits of limited liability companies. The Corporation Tax is justified by the distinction of the existing law in favour of such corporations, and it may be regarded as a composition in lieu of the liability to Super-tax.
At another period of the Budget Debates of 1920 it was said that there were a certain number of people who had been turning their businesses and their investments into limited companies, paying the dividends into the limited companies and so avoiding the payment of Super-tax, and that the Corporation Profits Tax would get round the evading of these payments. That, apparently, has proved to be ineffective, because in the present Fin-
ance Bill we have a Clause under which it is proposed to enable the Inland Revenue Authorities to assess for Supertax the amount put to reserve in private companies. Therefore one of the reasons given us two years ago, in favour of the establishment of the Corporation Profits Tax, has disappeared. In the first place, it is not, and never will be, a substitute for the Excess Profits Tax, and, in the second place, it has in no way caught the people who by forming private companies escaped the payment of Super-tax.
I would next call the attention of the House to the yield. In his Budget speech in 1920 the Lord Privy Seal said that he estimated that the receipts for the current year would be £3,000,000. They turned out to be £650,000. Last year the Chancellor of the Exchequer stated that in 1920-21 the yield would be £30,000,000. The actual receipts proved to be R17,816,000. The Lord Privy Seal's prediction that eventually he would get. £50,000,000 a year from Corporation Profits Tax, was the wildest estimate ever made during the period when he was Chancellor. I would remind the House of what the general method of taxation in this country is. We have indirect taxes and direct taxes. Indirect tax s are generally supposed to enable those who would not pay direct taxes to contribute in some way, by the purchase of sugar, tea, beer, and tobacco, towards the expenses of the nation. It is an easy way of getting people to pay taxes without their realising that they are doing so. It is also a way of collecting something from foreigners who visit this country and who, otherwise, would not contribute anything towards our revenue.
As regards direct taxation we have gradually in the course of time endeavoured to make a man pay according to his means. There has been graduation, and more skilful graduation as time has gone on, according to a man's total income from all sources, so is he taxed. The Corporation Profits Tax does not follow that principle at all. The amount of profit made by a limited company is taxed. It actually comes out of the pockets of the ordinary shareholders, and in proportion to their holdings, but not according to their private income from all sources. So you may have a man who is a shareholder in a limited company with a very low income on which he should only pay 2s. 6d. in the £. He
receives the dividend from a limited company, but prior to that a portion of his dividend is taken from him in the shape of Corporation Profits Tax, so that he may be actually paying 4s. 6d. on his yield from that company. The Corporation Profits Tax is to the advantage of the rich man who holds shares in a company and to the disadvantage of the poor man, because if you have no Corporation Profits Tax on a business, the amount of total profits would be increased. You could increase the dividends paid to the shareholders. The shareholder, if a rich man, would pay at his own rate of Super-tax on the dividend, but the poor man would receive the increased dividend and have no Super-tax to pay on it, and he would be the gainer. Since there is a Corporation Profits Tax, he is taxed more heavily than the wealthy man.
The last point which I wish to make is this. Before the Royal Commission on Income Tax it was pointed out that there was continually a large amount of evasion of Income Tax or that, at any rate, the Inland Revenue did not collect the total amount of income tax that was actually payable. The hon. Member for Central Edinburgh (Mr. W. Graham) has spoken several times in the House on this particular point. The more Inland Revenue officials have to do the less are they able to look after those who are trying to evade payment of Income Tax. The Treasury claim, I think perfectly fairly, that the Income Tax and all other taxes are collected in this country at a minimum of expense, and that they have a minimum of staff employed on the work. If you take the Corporation Profits Tax away from every inspector of taxes in the country, a tax which is not yielding 220,000,000, you will so reduce the work which they will have to do that they will have time to go after the people who are trying to evade Income Tax, and the extra Income Tax which they will get in this way may be worth far more than the yield of the Corporation Profits Tax. I hope that this will be considered by the Chancellor of the Exchequer. He has had this tax for two years. We were told that he would get £50,000,000 out of it, but the receipts are more than £30,000,000 under the estimate, and now he has only estimated for £19,000,000. The tax is unfair in its incidence, and inadequate in its yield,
and handicaps the officials of the Inland Revenue in doing what we may call their regular work in an efficient way, and I believe that, because it is mainly placed upon certain classes of traders in this country, it is likely to prove detrimental to the recovery of trade.

Sir A. WILLIAMSON: I would like to say to the Chancellor of the Exchequer what an advantage I think he has conferred on the country by the reduction he has made in the rate of income Tax. I do so, not upon the ground of selfish interest, but upon the ground that by reducing the tax he has given, and will give, an encouragement to enterprise and a confidence which will tend to restore that trade which we so much require. There is no doubt that the effect of reducing the Income Tax has already been beneficial. It. has encouraged enterprise, and will do so still more when people see that trade is gradually reviving, and, with the increase of trade, there will follow increased employment which is so much needed.
There is one point in connection with Income Tax on which I would like to express my views—that is the question of double Income Tax. I do not know whether the House is fully aware of how much we suffer as a nation by the imposition of double Income Tax. It is practically impossible—shall I put it that it is impracticable—to-day for British citizens to start an enterprise and invest their money in any country such as the United States, because our Government charges full Income Tax upon the profits made there, and the same profit has to pay the American Income Tax, rendering the operations impossible in competition with similar enterprises undertaken and domiciled within the United States itself. If an American citizen comes to England and establishes an enterprise, let it be tube railway or anything else, he pays, it is true, in this country the British Income Tax, but when he is assessed in the United States for Income Tax, the whole amount that he has paid here is deducted, not from the assessable income but from the actual amount of tax that he has to pay in the United States. Take the case of an American whose Income Tax liability to the United States amounts in dollars to £20,000, and who,
has already paid in Great Britain £10,000. The result is that he only pays to his Government £20,000 less £10,000, that is, £10,000 in all. He is only paying once. Look at the advantage which he has in going abroad to establish a business, and look at the disadvantage from which we suffer. It is impossible for us now to go to America, where there is high taxation, and establish industries, in view of the double tax incurred.
I would put another case. I know a cement company which is quoted on the Stock Exchange, which was established by British enterprise and money in the United States. It pays the United States Income Tax and it has to pay British Income Tax not only on the dividends paid to shareholders in this country, but on the dividends paid to those who live in America. That company has alongside of it an American Company, competing in the same market with the same machinery, and the same raw material, but subject only to the one tax. Consequently it is able to put aside money to reserves, depreciation, building up and extending its business, which it is impossible for the British Company to do in view of the double taxation. This is a matter of such urgent importance to the trade of this country that I wish to call the attention of the Government to it. This matter of double Income Tax is not confined to the case of the United States and this country. Almost every country in the world is now thinking of the imposition of Income Tax, and we shall repeatedly be faced with double Income Tax where-ever we like to make our investments. Think of the impossibility of going on conducting foreign enterprises from this country. If such a condition comes about the result will be that these enterprises which would be radicated here will be radicated abroad. We shall not have that encouragement we have had in the past to extend our enterprise abroad and build up those orders for English goods, etc., which followed from the connection with this country. When concerns are domiciled abroad the orders for goods will go abroad, and you will lose the advantage which you have by radicating the enterprises in this country.
I wish also to say a word about this tax which is directed against the one-man company. I have sympathy with
the Government and the Chancellor of the Exchequer in the object which they have in view, but I do not know if the House has considered the Clause as it stands in the Bill and exactly where it reaches. As I read it, it reaches every private company which has fewer than 50 shareholders, and which has not made an offer of its shares to the public. I imagine that that applies to most private businesses worked under the Companies Acts and to all the small shopkeepers who have their businesses in private limited companies—and there are many thousands of them—and it would also apply to many companies radicated here in London, which are working enterprises abroad. I know a company with fewer than 50 shareholders which works a large business on the West Coast of Africa. I know another with fewer than 50 shareholders which has made no public issue of its shares, which works a business in South America, and there are many others. All these companies will come under the scope of Clause 14, as I read it. Even the fishermen in my constituency who have boats in common will come within this Clause.
I do not think that the House realises how far-reaching is this Clause. Also a shareholder in a private company is going to be handicapped as compared with a shareholder in a public company, because in the private company it is now proposed to deal with money put away for such things as reserve or writing off the cost of the issue of debentures or writing off preliminary expenses, or for the repair, for example, of business premises, or providing new business premises, all of which are done by prudent companies out of revenue. If a public company makes profits out of which a certain amount is paid in dividends on which Income Tax is paid, the rest is often and wisely used for the purposes enumerated, but in the private company it is placed within the power of a Government Department to say at their sole discretion, "This money you have put aside, the profits you have used for writing off your preliminary expenses, repairs and alterations to premises, and payments to reserve for coming bad trade —all these we consider to be unnecessary and unreasonable, and consequently we are going to assess at our sweet dis-
cretion your shares in this private company, and you must pay." That will discourage common prudence and good business methods. It is a very far-reaching Clause which should be scrutinised closely by the House before it is passed into law.
That being the case, I suggest that the Government, if it has in mind only the one-man companies, should consider what the law is about companies. The public company has a minimum of seven shareholders, and the private company has a minimum of two shareholders. Let the Chancellor of the Exchequer consider this step as one which would be more reasonable than the Bill: let him limit the operations of this Clause to those private companies which have not more than seven shareholders. Perhaps seven is a liberal number, for, if it be only a one-man company which is aimed at, five would suffice for the purposes of the Chancellor.
Clause 15 of the Bill gives too wide a power to the Commissioners of Super-tax. It gives them power, which they have not at present, in the way of asking for details and information which, if abused, might be used in a penal way against any individual with whom they were at variance, I do not know whether hon. Members have studied the Clause. The powers might be open to abuse. While I would never suggest that in the ordinary course a Government Department would abuse its powers, we all know that if powers are inserted in an Act they are liable, on occasion, to be used to the utmost extent permitted.

Mr. PRETYMAN: May I say how much I agree with nearly everything said by the last speaker? In the matter of double Income Tax there is a precedent. The subject was brought before the Income Tax Commission, of which I was a member, and a Sub-committee which was appointed went into the whole question of double Income Tax within the Empire. After very great difficulty what, it is hoped, will prove to be quite a satisfactory arrangement was made for the avoidance of double Income Tax within the Empire. That scheme is now in operation, and I do not think it has caused any trouble. It is obvious that the reaching of a satisfactory arrangement governing double Income Tax outside the Empire will be possible only
by conference with other Governments and by reciprocity on both sides. The precedent of the arrangement within the Empire might be followed, and it would he a great advantage to the trade and industry of the country if the Chancellor of the Exchequer would examine the question further and see whether something can be done. We have reached a point in taxation when the Chancellor of the Exchequer has not so much to consider individual hardship when remitting or altering taxes as the burden on the trade and industry of the country. The object of the Chancellor of the Exchequer is to maintain revenue, and to maintain the stability of trade and industry upon which all revenue depends. He realises that, quite apart from the hardship which taxation inflicts, the effect of the present burden of Income Tax is such that in mnay cases it has to he paid out of capital. There you have a capital levy already.
In the case of the Income Tax and Super-tax at their present high level, the money cannot possibly be paid out of income and is distinctly paid out of capital. I do not want to debate that again, for I believe the Financial Secretary to the Treasury is convinced that the tax must be paid out of capital and that, in that sense, it is a capital levy. It is a direct cause of extravagance. Suppose a man has £1,000, which he has realised from selling something, which sum he would normally treat as capital. If he invests it—which he would do as a prudent man—and is liable to the full rate of income Tax and Super-tax, with prospective Death Duties and other burdens, ha might have to pay 15s. in the £. What would he get by so investing this £1,000? About £20 a year. What is the good of that to him? When he dies the State will take about half of it. Such a man knows that if he spends the £1,000 on something amusing and entertaining he gets the whole of it. It is putting too great a strain on human nature to expect a man to do otherwise. That is why the scheme is a direct cause of extravagance. To stop individual extravagance it is necessary to reduce taxation.
I regret very much that the Debates on the financial position of the country are falling back into the old groove and into an argument between direct and indirect taxation as a matter of hardship to the
individual taxpayer. We had the old argument used by the hon. and gallant Gentleman (Colonel Wedgwood), who moved the rejection of the Bill. He spoke of the great advantage to the working classes of a reduction in the Tea Duty and the Sugar Duty, and said the reduced Income Tax was merely taking something off the burden of the rich. I suggest that the Income Tax at its present level is causing far more hardship to the working classes than the Tea Duty or the Sugar Duty. It is directly causing unemployment. Let me deal with the side of the question which I know best. That is the question of the burden of taxation upon agriculture and the rural population. I can say, from practical experience, that, with the present level of taxation upon rural areas, it is impossible to employ the proper amount of labour and to keep land in a state of cultivation. The principle of the Chancellor of the Exchequer is not to take Income Tax off farmers in order to benefit the individual farmer, but in order to keep the land in cultivation and to enable the farmer to employ labour, and so produce food in this country instead of having to buy much of it from abroad.
When dealing with the burden of taxation on agriculture, it is not so easy to reduce expenditure on the cultivation of land as to reduce expenditure on the production of some manufactured article. You can produce a percentage less of the manufactured article, although it is very injurious to do so. In agriculture, however, the difficulty goes farther. Not only is there the direct result that by reducing expenditure you reduce the actual output, but the whole cultivation of the land suffers, and when you reduce labour on a farm you not merely reduce the actual output of a farm by a certain percentage, but you reduce the whole cultivation value of that farm, and when a farm goes short of labour it is on the descending scale. Therefore, if the Chancellor of the Exchequer desired to continue receiving revenue from agriculture, he was bound to reduce the burden of taxation upon agriculture. When my hon. and gallant Friend dealt with Income Tax, I do not think he realised that, after all, Income Tax is a tax upon profits. There is a large proportion of Income Tax which is not paid on actual profits but is paid
on statutory income. The changes which the Chancellor of the Exchequer has made deal largely with that particular form of taxation levy. Surely it is quite beside the mark to suggest that this man or that man pays too much or too little tax unless you can prove that the levy upon him is a tax upon his actual profits or actual income or as near it as you can get?
In the case of agricultural land, the reason why we pressed that Schedule B should be reduced from two years' rent to one year's rent was that, clearly, under present circumstances, no farmer can expect to make more profit than would be represented by one year's rent. It used to be one-third. It was then raised to one year, and afterwards to two years during the War, when prices were high. It is only fair and reasonable that where a. man cannot usually make more, and may often make a great deal less than a profit equal to one year's rent, the statutory figure at which the compounding rate is fixed should not be more than one year's rent. So far as amenity land is concerned that direct point arises. Amenity land is the land, in the shape of gardens or pleasure grounds, exceeding one acre, attached to a residence. It is clear that no profit is made out of the ownership or occupation of that kind of property. I do not know whether hon. Members realise that where a man has amenity land he has now to pay under Schedule B as well as under Schedule A. It means that he pays the tax twice over. Suppose a garden and pleasure grounds are assessed at £20 a year under Schedule A. Although he makes no profit out of it, the occupier has to pay on double that assessment, that is to say, on £40. It is only fair that his Income Tax should be on some figure which might reasonably represent the sort of profit which he is able to make, and it is surely reasonable that he should not have to pay more than one-and-a-third times the assessment. On a house the owner only pays once, and there is just as much amenity in the house as in the garden in which he grows his vegetables. But when this Finance Bill is passed and the Clause in question becomes law, he will pay one-and-one-third times on his garden where he pays once on his house.
I must again thank the Chancellor of the Exchequer for the concession which he has given, but it is very regrettable, in my opinion, that the repairs and main-
tenance relief which is to be given under Clauses 17 and 18 should be deferred until the year 1923–24. I do not understand the reason for that. Clauses 13 and 14 are designed to tighten up and increase revenue, while Clauses 17 and 18 are designed to give relief. I notice that Clause 13, affecting trusts, comes into operation as from 5th April of this year, while Clause 14, respecting Super-tax on companies, operates as from the 5th April, 1921, or over a year ago. But the two relief Clauses only come into operation at the beginning of next financial year in April, 1923. That seems particularly unfortunate. The relief extends the principle of Section 69 of the Finance Act of 1909–10, to all property, and we should consider what will be he effect of deferring it. One of the main advantages which that relief gives to the country is that of increased employment. At present people who might have repairs to do and maintenance work to carry out on buildings and property, get no rebate in Income Tax in respect of such expenditure and are, consequently, unable to proceed with the work. At the same time the Government is paying large sums in relief of unemployment in the shape of doles. Surely, it would be far better for the State to give this relief and get property put into repair rather than to go on paying doles to unemployed who might be doing useful work in this way. I take it that is one of the main objects of this proposal.
Unemployment is very rife to-day, we hope next year it will not be so rife, but if anything be urgent in the matter of finance, it seems to me nothing could be more urgent than to get, people started as early as possible, on this kind of work, and to keep them off the unemployment dole. It is quite clear that people who have this sort of work to do will defer it until they can get the rebate on Income Tax. It certainly will not he done this year, and thus, so far from accelerating the provision of work, this will prove to be a delay, People who would be doing work this year if it were not for the prospective relief, will postpone that work. That is merely ordinary business. Everybody who has a house which he proposes to paint or repair will not do it this year, but will put it off until next year. I hope the Chancellor of the Exchequer will make the small alteration necessary to bring in this relief at once. I should also like to ask the Financial Secretary to the Treasury, when this
maintenance and repairs Clause comes up in Committee, to tell us how the five years' average is to be worked. There are several ways of doing so, as he understands, and I do not wish to go into details in a Second Reading Debate, but I hope in Committee he will tell us how it is to be worked.
As to Clause 15, I think the powers which it is proposed to confer on the Special Commissioners require serious consideration. The Special Commissioners are Government officials, and what applies to Income Tax also applies to Super-tax, which is merely additional Income Tax. Clause 15 seems to be going very near the line of the proposals in the Revenue Bill of 1920, which were rejected by this House. It is a proposal to give Government officials, in the first instance, without any appeal to any independent authority, the right to demand documents and make the inquisitorial investigation which is in this Clause, very indefinitely laid down, and appears to me to be very extensive indeed. I think it is right that those who intend to raise points in Committee should at, this stage outline their position, so that the Treasury may be prepared to explain and deal with those points. That is one matter on which I am sure there will be considerable debate. There are other points which some of us will have to raise in Committee. A new Clause will be put down dealing with Death Duties on agricultural land. I do not wish to ask the Chancellor of the Exchequer to give us any more relief in this Budget than he has already given.
We recognise that the right hon. Gentleman has done the best for us that he could in the circumstances, but the harden of the Death Duties, as now levied on agricultural land—owing to the method of levying and not merely to the weight of the duties—is a matter which calls for consideration. The method of levying may be suitable for industrial property and for land which is being developed for building, but for purely agricultural land it is most unsuitable and is causing great difficulty and distress in the country. Some of us on the Agricultural Committee propose to develop these points in detail on the Committee stage, so that the House may see what our suggestions are, and I hope next year we may get something done. There is a small point in which a large
number of agricultural labourers are interested. Under the present Excise law a labourer living in a house under £8 valuation is allowed to brew during the year, free of licence, two bushels of malt in the summer season. That privilege is greatly valued. We have had deputations to the Inland Revenue Board on the subject, and I hope we may get that privilege extended to four bushels of malt, and the time limit of the summer season abolished. The present price of beer is extraordinarily difficult for the agricultural labourer to meet out of the wages he receives.

Mr. RICHARDSON: And the miners.

Mr. PRETYMAN: Yes, I agree, but then the miner will have the same privilege. This privilege extends to anybody who lives in a house under £8 value, whether he be a miner or an agricultural labourer. May I also remind my hon. Friend that the miner at any rate gets free coal and the agricultural labourer does not.

Mr. RICHARDSON: Only some of them do—not all of them.

Mr. PRETYMAN: Well a great many of them do, but the agricultural labourer does not get free bread, although he grows the wheat. The miner in most cases has the advantage. This is not the privilege of the agricultural labourer alone, but it is his custom, particularly in the Eastern Counties, to home brew more than other workers in the country, and I believe there are a good many workers in Lancashire, both miners and others, who do the same thing, and this would apply equally to them all. We are not asking for a special privilege for the agricultural labourer. The effect on the revenue would be trifling, but the advantage would be greatly valued by the working classes who are in a position to brew at home. Another matter which will have to be raised is that of a very wasteful procedure which is continued in connection with the transfer of land. On every transfer of land to-day or on every grant of a lease of over twenty-one years, particulars have to be furnished for increment value duty. That involves the expense of a guinea and a half—the ordinary charge of the solicitor who is executing the conveyance for furnishing these particulars and getting the stamp
affixed which has to be done in every single case. Now that there is no increment value duty it is a pure waste of money, and the revenue gets nothing out of it. It is merely an additional burden on the subject. I have been sitting to-day on a Committee dealing with the Law of Property Bill—a measure which is designed to cheapen and simplify the transfer of land. By merely striking off this unnecessary item you could cheapen every land transfer by a guinea and a half, and I hope the Chancellor will give favourable attention to this suggestion. I hope when this Bill is in Committee we shall get a statement as to who are to be the assessors appointed for the reassessment under Schedules A and B. Are they to be officials or not? My hon. Friend the Financial Secretary to the Treasury will see that a great deal rests on that.
8.0 p.m.
At present when land is liable to Death Duties, eight years are allowed during which the Duty may be paid off by instalments, but that privilege does not extend to other property. I do not know why that should be, and I hope if an Amendment is put down in regard to this, it will be favourably considered. Now that the Death Duties are at such a high level, it is a serious detriment to any business in which a very large block of shares is held by one individual when that individual dies. In that case the whole block of shares has to be realised in order to pay the Death Duties. It would be a great convenience in many businesses and of great assistance, and preventing injury to a business through the death of a large shareholder, if the privilege of spreading payment for Estate Duty over eight years were not confined to land, but extended to other forms of property as well. I hope my list of questions has not frightened my hon. Friend the Financial Secretary to the Treasury, but this Finance Bill is our only opportunity of raising these matters. The angle from which I have, approached this Bill throughout has been to see how we can, without any considerable sacrifice of revenue, do most to benefit trade and business, and to prevent the injury which heavy taxation causes, for it is quite clear that there may be directions in which, by a comparatively small sacrifice of revenue, we may give a very big advantage and help to trade and industry by
a little thought and tact, and my hon. Friend may rely upon me that any criticisms or suggestions that I have to make will be made from that point of view. I understand that the revenue must be obtained, and I know very well that it cannot be obtained without hardship. I am not here to complain of hardship on the part of anybody, and all I ask and suggest is that any Amendments which are put forward from the point of view of giving relief to trade and industry, and so increasing employment, by a comparatively small sacrifice of revenue, should receive sympathetic consideration from the Government.

Major-General Sir J. DAVIDSON: I wish merely to add one word to what has been said already in regard to that portion of the Bill which deals with the evasion of taxation. The Chancellor of the Exchequer said in his Budget speech that avoidance had recently become prevalent, and he referred to the setting up of one-man companies in order to avoid taxation. No one could wish to permit the avoidance of taxation; everybody indeed is anxious to catch the evader, but it seems that Clause 14, which deals with evasion, will not only not catch the evader, but will go beyond that and impose excessive burdens on private limited liability companies. I am not going to deal in detail with this subject just now, which is one more properly to be dealt with in Committee, but I should like to draw the Chancellor's attention to one or two matters of principle involved. The Government proposal, roughly, is to subject a portion of the undistributed profits of these limited liability companies to Super-tax, and a Board of Referees is set up to decide the portion of the undistributed profits to be so subjected. In other words, the Board of Referees will decide what amount may be placed to reserve and what may be distributed, and it seems to me that this is entirely wrong. The bulk, or anyhow a very large number, of the companies affected are merchant companies, whose business is essentially speculative and whose profits and losses are accentuated, and it is their business to build up very large reserves in good times to meet the very heavy losses in bad times. Everybody knows that there are great fluctuations in trade, and statistics show that after a period of 12 or 15 years there is a succession of two, three,
or four bad years which have to be provided for.
Even the genuine companies, established long before there was any question of evasion, will no longer he able to control their own affairs, and they surely must be the best judges, and the only judges, of what they should put to reserve and what they should distribute. Notwithstanding the periodical and heavy losses which these private limited liability companies sustain, and the speculative nature of their businesses, they are now to be subjected to four different classes. of taxation. There is, first of all, the Income Tax, secondly the Corporation Profits Tax, thirdly the Super-tax on distributed profits, and now, fourthly, there is to be Super-tax on a portion of the undistributed profits. I venture to think that if such a Clause as this be allowed to go through, it will have the effect either of driving a number of these private limited liability companies out of the country or making them seek some means of evasion.
I understood that the Corporation Profits Tax was originally instituted in substitution for some form of tax on undistributed profits, but now it appears that this tax is to be, not in substitution, but an additional burden, and this just at the time when trade is showing some signs of revival and when we want to do everything possible to encourage it. In my opinion, the effect will be in reality to hamper trade. To merchant companies, whose duty it is to accumulate large reserves, this interference will be most detrimental. It must be remembered that these private limited liability companies are the successors of private firms. They did not assume limited liability to shelter themselves from their creditors: on the contrary, they assumed limited liability for their own safety but with the intention at the same time of building up such adequate reserves as would give ample protection to their creditors, and facilitate their own operations. They have been bound to build up large reserves, and these large reserves have not been used in the past, and are not now created, to evade taxation. The Chancellor of the Exchequer says that evasion is increasing. Is it not possible to discriminate between the genuine companies and the one-man companies or similar companies
which have been created in order to avoid taxation? This is a subject which requires careful scrutiny during the Committee stage, when I hope to bring the matter forward again.

Major BARNES: I did not have the opportunity of hearing the whole of the speech made by the right hon. Member for Chelmsford (Mr. Pretyman), but when I listened to that part dealing with the question of the particulars that will have to be furnished to the Inland Revenue on the occasion of the sale or lease of land, I thought that I have always failed to understand why, in the early years of this Parliament, when the right hon. Gentleman secured the first signal triumph of the Conservative section of the Coalition over the Liberal section and compelled the Prime Minister to swallow his Land Taxes, he allowed this remnant of that iniquitous taxation to remain. Ono of my earliest recollections in this House was the withstanding of him by the then Chancellor of the Exchequer, when he was pleading that this last remaining burden should be abolished, and I shall watch with a good deal of interest his efforts during the Committee stage of the Finance Bill, if they are to be directed to getting rid of this, to see how they succeed and whether he will find the present Chancellor of the Exchequer more complacent than he did his predecessor. As I say, I had not the opportunity of hearing the first portion of the right hon. Gentleman's speech, so I do not know whether he referred to this development of the work of the Land Valuation Branch of the Inland Revenue which is going to take place under powers which the Chancellor wants to get under this Bill.
There is a whole paragraph in the Chancellor's Budget speech dealing with the re-assessment of land and house property, and I have been looking through the Finance Bill, and see that there is quite a formidable Schedule—the second Schedule, I think—which lays down the procedure in connection with the determination of annual values for the purposes of Income Tax under Schedule A and Inhabited House Duty for 1923–24. I do not find any reference in the Chancellor's speech, or in the Schedule, to the fact that the persons who are going to be employed to do this are persons at present
engaged in the Valuation Branch of the Inland Revenue, but I rather gather that that is what is going to take place, and I am certain that the right hon. Member for Chelmsford knows even better than I do what procedure is going lo be adopted. I do not know whether he proposes to resist this investigation or to do anything to modify it, and I do not know whether the Chancellor will cling to the particulars of which he has spoken as a means of the Valuation Branch carrying on its work. I would not commit myself to saying its very necessary work, although I see that the Chancellor of the Exchequer pointed out in his speech that great changes have taken place in the value of land and houses, and that a re-assessment is necessary, which will involve an immense amount of work. It must have sounded to the right hon. Gentleman the Member for Chelmsford very much like the old Form IV days, and I should have thought a kind of vista opened up before him of the procedure on the part of the Inland Revenue which would really call back to all its former determination and energy the work of the Land Union. Whether that be so or not, time will show, but it is rather significant that in the very Budget in which the Chancellor of the Exchequer is making concessions to the landed interests of this country, about which I shall have another word or two to say later, he is stressing the fact that they have since 1910 escaped contribution of their fair share to the revenue of the country.
On the Finance Bill generally, I suppose that with the present Government, the present House, and the present Chancellor it is the kind of Budget that might have been expected. The right hon. Member for Paisley (Mr. Asquith) made some charges of extravagance in the past but the Chancellor of the Exchequer will not admit that there has been any extravagance. For the last two or three years the ears of the country have been filled with the volume of complaints and charges of extravagance, but the Chancellor will have none of them. He refers to the commitments that existed at the end of the War, the obligations, financial and military and honourable, all of which involved expenditure, and his submission is, as I understand it, that all has been for the best possible good in the best of all possible Treasuries, that nothing could
have been saved, and that nothing has been wasted. I should like to test that view, not from any outside opinions, but from what has actually taken place in the Treasury itself and what has been done by the Government.
We have had something like three and a half years since the Armistice. I do not propose to say anything at all about the first year and a half. Those were exceptional years, undoubtedly, but reasonably-minded people did expect that, at the end of 18 months, the Government would settle down to something like normal expenditure. They have got to a point of reduction this year, and it is upon what they have done this year that I propose to test what they might have done during the past three years. I think it is a test not too severe and stringent, because you have to bear in mind that, even in the present year, they have not come up to the expectations of the Geddes Committee. According to Sir Eric himself, they have a very considerable margin this year over and above what they ought to have, but, allowing for all that, and taking the present year and comparing the last two, what is the position? On the fighting services during he years 1920 to 1922, well after the military situation had settled down, they had spent over £600,000,000. This year they are proposing to spend something under £170,000,000, so that the expenditure for the two years, instead of being £660.000,000, might have been rather less than 2340,000,000, so that there is £270,000,00 over and above what would have been the sum for the three years on the present year's expenditure.
Coming to Civil expenditure, in those last two years they have spent £1,077,000,000. Taking the present year as the basis—a year in which they are spending £346,000,000—if they had pursued the path of economy they are pursuing to-day they might have saved in those two years £385,000,000. So that for the two years on the Fighting and Civil Services combined they have overspent, taking the rate at which they are spending in the present year, a sum of £655,000,000; that is by getting away from all the military obligations of the year, and getting into what might have been normal times, if the policy of the Government had been otherwise than it has been. I want to be as fair to the Chancellor of the Exchequer as an opponent of the
Government can be, and I think that from that £655,000,000 it is right and proper to write off exceptional charges during those years. There are Loans to Dominions and Allies which do not appear in these accounts, payments to the railway companies under the Agreement, the bread subsidy, the expenses of the Ministry of Munitions and Ministry of Shipping, besides some expendture for food control and expenditure under the Mines Agreement. Wiping all these things out as being things which do not fall under the present year's expenditure they can be put at about £225,000,000. If you deduct that from the expenditure, you are left with the normal expenses. So that, making every allowance it is possible to make there is a sum of over £400,000,000 which during the last two years might have been saved and which the Chancellor of the Exchequer might have had in hand to-day. Curiously enough, that sum approximates fairly closely to the amount which we consider has been thrown away in Russia, Iraq, Egypt and other parts of the world. These sums have been generally estimated, I think, at something like £300,000,000. The Chancellor of the Exchequer has now got a surplus, not very creditable, as some people think, but he has got it. I do not suppose Chancellors of the Exchequer care very much how they come by things, so long as they do come by them. The Chancellor of the Exchequer when he came to consider his Budget found himself with a balance of £46,000,000, of which he might dispose; that is, after he has taken to his credit £90,000,000 still remaining in the disposal of stores, etc. Rut taking that £90,000,000 into revenue, and disregarding his Sinking Fund, he has left himself with £46,000,000 to give away.
How has he given it, away? He has given the largest amount away in Income Tax. The hon. and gallant Member who moved the rejection of the Bill said that this was a rich man's Budget, and I do not think that is an unfair description. £46,000,000 of relief has been given to those people who least needed it. To test it, we have had furnished to us what is a very helpful document—a table illustrating the effective rates of Income Tax, which justify the charges that have been made that this is a rich man's Budget. On page 4 there is a scale which sets out the different amounts paid on income.
The Chancellor of the Exchequer says that it is absurd to say that if you relieve Income Tax you are relieving the rich. He said it was not only the rich who pay Income Tax, but that when you relieve Income Tax you relieve a great many people. I see they are set out here in their categories, and I propose to take two extremes. Here is a poor fellow with £150,000 a year. When he has paid his Income Tax, all he is left with to carry on a miserable existence is £62,476 a year. What can a man do with a sum like that? Obviously it was a man like that who needed relief. What the right hon. Gentleman has done to this burdened sufferer is that he has given him relief to the extent of £7,468 12s. 6d. a year. That is not, much, of course, but it is something. He will be able to get his Rolls-Royce out of pawn, and perhaps get an extra week-end or something of that sort. But it is quite true, as the Chancellor of the Exchequer points out, that that is not the only class of people who get relief under this Budget. The man with £500 a year gets his relief too. A man with £500 a year, as a rule, is drawing a salary or income more or less fixed: for instance, a country parson or civil servant, or somebody who is in more or less of a position of trust, the kind of person, say, upon whom the War has fallen with particular force, who is endeavouring to give his children a good education, and probably has not taken advantage of the provisions of the new Education Act. He may be keeping a son at college. He has£500 a year on which to do all that, and to keep up appearances. He has got to deny himself in all sorts of ways, and to spend very little except on the simplest pleasures. He is a fitting subject for relief. The Chancellor of the Exchequer recognizes that, and consequently gives that relief according to the scale. Having relieved the other poor fellow to the tune of £7,468, he feels that something must be done for this case. I find on looking over the list that this person is not forgotten. He gets relief, it is true, but not to the tune of £7,468. He gets the really substantial amount of £2 7s. 6d. There are similar cases attempted to be justified on a good many grounds. But you can mainly justify the Budget on Biblical grounds, for so far as I can see it has been framed upon sound Biblical principles, which is to those
who have shall be given. That is the foundation of the Budget.
Other forms of relief are given. The Chancellor of the Exchequer, I think, rather objects to the description of the Budget as being a rich man's Budget, but it is hard to get away from that idea when you look at some of the other forms of relief. Take the relief in respect of amenity lands. These are, as I understand, lands that surround a dwelling house which are laid out in parklands, gardens, and so on, that make for beauty and convenience, and make the place a desirable place in which to reside. Prior to the War these were assessed on a basis of one-third. During the War they were assessed on the full annual—

Mr. PRETYMAN: One and one-third.

Major BARNES: How is that?

Mr. PRETYMAN: They come once under Schedule A and one-third under Schedule B.

Major BARNES: The point I want to make clear is the effect of this particular reduction which is relief given for a period of the year, £150,000, while for the full year it will amount to £300,000.

Mr. PRETYMAN: This has nothing whatever to do with land increment, but only the actual value of the grounds surrounding the house. That would not be £300,000, or anything like it.

Major BARNES: I am afraid the right hon. Gentleman has not given that attention to the Chancellor of the Exchequer that his speech really deserves.

Sir R. HORNE: The right hon. Gentleman (Mr. Pretyman) is quite right.

Major BARNES: Well, I will just take the opportunity of quoting the right hon. Gentleman's own speech:
These proposals will, I estimate, in the case of what are called amenity lands, mean a loss to the Exchequer of £150,000 in the present year and £300,000 in a full year."—[OFFICIAL REPORT, let May, 1922; col. 1035, Vol. 153.]

Sir R. HORNE: Quite right.

Major BARNES: These are the figures.

Mr. PRETYMAN: Yes.

Major BARNES: A little earlier the Chancellor of the Exchequer said:
In the case of land which is not being agriculturally dealt with, where there is no
profit, and very often only expenditure, ill those cases I propose we should go back to the pre-War rate of assessment, that is one-third of the annual value."—[OFFICIAL, REPORT, 1st May, 1922; col. 1035, Vol. 153.]
In regard to the agricultural land, that was increased in the War, and I have, for precaution, read the words of the Chancellor of the Exchequer. He said:
During the War, in the case of farmers tilling their farms, the basis of assessment was raised, at first to the annual value and then to twice the annual value."—[OFFICIAL REPORT, 1st May, 1922; col. 1034, Vol. 153.]
Farmers indirectly, I suppose with the owners, say that their taxes went up 30 times. First of all, the basis of assessment went up from one-third to twice, which was a sixfold increase, and then, with the going up from 1s. 3d. to 6s., it was about five-fold, so that really in the case of these lands they were, during the War, increased some thirty-fold! That does seem as if, just before the War, they had been escaping, in some quarter or another, anything like a fair assessment. At all events there is that very considerable amount of relief being given. I understand that that was given in response to some requests of some deputation or other which appeared before the Chancellor of the Exchequer. I shall be very much interested to know whether these representations came purely from farmers, or whether they were backed up by the landowner, as distinct from the land-using; interest, because this must have an indirect effect upon the lands. It must be a very difficult thing to maintain the rent if your tenant can say to you: "Well, now, look here! As things are, for every £1 of rent my basis for Income Tax is fixed at £2." This must be a very difficult position. I can quite believe, apart from the farmers themselves who rent the land, this concession must be viewed with a great deal of confusion which cannot be said at all for the relief given to the poorer classes of the community. The only thing they get is the Tea Duty, and the only point I make on that is one which the Chancellor of the Exchequer I hope will meet in Committee, and that is the 4d. in the lb. is not a fair and candid reduction. It appears to be 4d. and is not. The right hon. Gentleman looks up with surprise, but he is not really surprised.

Sir R. HORNE: To put it the way the hon. and gallant Gentleman wishes
would give a preference to which he would object!

Major BARNES: It would, I agree, but the Chancellor of the Exchequer knows perfectly well that this has the effect of reducing the preference by only one-third; to that extent it is good. The Chancellor of the Exchequer knows perfectly well that this is only off 10 per cent. of the tea which is drunk in the country. Ninety per cent. of the tea drunk is not taking the 4d., but only 3d. and two-thirds of a penny, and it is impossible to divide that 3d. and two-thirds to enable reductions to be made on the smaller quantities of tea. I hope that in Committee the Chancellor of the Exchequer will, at least, make the reduction 4d. all round.
This is supposed to a Save-the-Trade Budget. I do not believe anybody really believes it is, for the amount of relief in Income Tax that is given will have no substantial effect upon trade. Some of the strongest supporters of the Government, like the right hon. Gentleman the Member for Norwich (Mr. G. Roberts). and Mossley (Mr. A. Hopkinson), have pointed that out in the course of the Budget Resolutions. One knows perfectly well that this remission of something like £20,000,000 a year is going into, the pockets of those who will employ it in other investments. Nobody will believe that the addition of £20,000,000 added to the fund at present available for investment is going to make a substantial difference in the trade conditions of the country. What we really want to. do is to get good trade going, and what the Government can do very much more effectively than through the agency of the Budget is to retrace their steps in regard to the restrictions they have imposed upon trade.
Let them give real effect to and practice in this country the doctrines they have been preaching at Genoa. When the Chancellor of the Exchequer goes to Genoa, he is quite a different person to what he is here, and gives excellent advice to the members of the Committee, bringing them to sound conclusions, such conclusions as are necessary to get back prosperity in Europe. And what is good for Europe is good for this country—to get back to the gold standard, to a free market in gold, to have the fewest possible restrictions on trade, to get the best
and cheapest transport facilities. That was the foundation upon which the Committee over which he presided proposed to build up a new Europe. I say to the Chancellor it is only upon that foundation that a new England can be built up. It is not by Budgets such as this, which is, after all, nothing more than a form of relief to the wrong person. It is not by a Budget of this kind, but by bringing into real practical effect the conclusions of the Committee over which the right hon. Gentleman presided at Genoa, that he is going to do what I believe he wants to do bring about some substantial improvement in the trade of the country.

Mr. KIDD: The right hon. Gentleman has in his present financial proposals shown a fine native gift of making a very little go a long way. It is hoped that these present proposals will lead to yet better things next year. But we do not expect miracles in the domain of national finance, and if the hope referred to is to be realised it is quite clear that the burden must not be left entirely with the Chancellor of the Exchequer. We in this House must do something more substantial than we did last year to assist the right hon. Gentleman to guard both sides of the balance sheet. We must seek, not only to discover more real economies, but we must also seek in every possible way to encourage the increase of national wealth. I do not think after the bitter experience we have had in the past that many hon. Members.-or the public outside, will approve of the economies indicated in the speech of the last speaker, who seems to take exception' to any expenditure in any form having for its object the security of this country. Expenditure necessary to secure our island home and to secure our trade abroad in order to stimulate employment here is peculiarly objectionable to him.
I would almost wish that he had directed his very persuasive arguments to those countries who still maintain barriers against our trade, and who, by means of those barriers, are making the conditions of unemployment, bad as they are bound to be after a great War, still worse. Without danger to the State, and without endangering the employment of our people, I wish to suggest certain economies which I think might really be considered by the Govern-
ment. I allude to the expenditure occasioned to us by our scheme of local government. It does seem somewhat ridiculous that in the smallest county you have parish councils, town councils, county councils, and education authorities representing four spending bodies, and three of them independent rating authorities.
Now why cannot we consolidate and concentrate our local government more than we do? Even in the matter of the collection of rates, which is spread over three bodies, concentration in that item alone would effect a very large local economy. However much Members of this House on the platform may pretend that rates and taxes are two separate and distinct things, I hope that no Member of this House is prepared to forfeit his reputation for common sense by trying to maintain that position here. My view is that the best way we can give relief to the Imperial Exchequer is to discover some method by which we can effect a large diminution in local expenditure, and I suggest that by concentrating on the lines I have just indicated we could effect a good deal in that direction. I know I shall be met with certain sentimental objections, and I hope that I am as amenable to sentiment as any hon. Gentleman opposite. Take the parish area. It had its origin in the Church which, at one time, wits responsible for the maintenance of the poor and for education. When these burdens got beyond the power of the Church to maintain, then the people undertook them and the parish unit was still maintained. Again take the smaller boroughs. Sometimes they had their origin in the action of the feudal lord seeking to add to his own dignity and to the benefit of his vassals by the privileges of a Burgh of Barony. Later they arose to secure the powers of public health not then enjoyed as enjoyed now by the county council. The feudal power disappeared, but the Burgh unit remained while the powers of the county council in public health would now render the other class of Burgh unnecessary.
The position is ripe for a complete survey of our system of local government and when I have pointed out how accidentally were the parish area and the borough area; when I point out how the original reason for those areas has now disappeared, I hope I have gone a long
way towards establishing the case that the time has come when we might consolidate in the hands of the county council all the powers at present possessed by the parish councils, and by the overwhelming majority of our smaller boroughs. I have already referred to the education authorities. The fact of their creation as against the old Parish School Board is a proof that the mind of our people is already travelling in the direction which I have indicated. The old parish area scrapped and in its place you have the county education authority. You get a larger area and a larger conception of things, which I am sure in the end will be better for everybody interested in education. I believe I am right in saying that the original intention was that the education authority should not be anad hoe body but that education should be administered by the County Council. Unfortunately for Scotland that original intention was departed from.

Mr. DEPUTY-SPEAKER (Sir E. Cornwall): I think the hon. Member would have some difficulty in associating this topic with the Bill now under discussion.

Mr. KIDD: I only wanted to point out how greatly our education administration costs have risen since 1918, and that, if it were in the hands of the county council, the result would be great economy. It is of the greatest national importance that we should reduce the burden of local rating, because, indirectly, the result would be to supplement our national revenue in two ways: First, by increasing national revunue, and, secondly, by diminishing the cost of administration. With the present burden of rates no man will build a house when he realises that the rates may mean a double rent. That naturally also prevents anyone investing his money in house building. If we can reduce the rates and bring back house investment to the position it occupied before the introduction of land values, we would supply a primary need of this country, we would have a constantly increasing stream of new houses, the rateable area would thereby be extended, and the national revenue would be proportionately increased. It seems rather monstrous to continue to encourage a condition of things which makes for overcrowding and for the creation of slums and necessitates the maintenance
of a costly Ministry of Health. Let us largely diminish the rates and have a proper supply of housing on sound economic lines. We shall thereby largely increase our national revenue and by-improving the health of our people diminish the cost occasioned by the maintenance of the Ministry of Health. If we would assist the Chancellor of the Exchequer I said that we ought to encourage the increase of our national wealth. I am speaking in the presence of many members of the Labour patty who, I feel sure, will agree with me that, looking to the condition of our national finance at the moment, and looking to the difficulty of obtaining a living wage for the worker, the time has come when our trade unions should direct their efforts to purely economic purposes and should seek by investment to grow for the worker a share in management instead of being used as a mere pawn in the political game. By directing our attention to both sides of the national account along the lines indicated, I believe our financial position would be very much improved in a very short time.

Mr. WISE: I regret that the Vice-Chairman of the Labour party (Colonel Wedgwood) is not in his place. The Chancellor of the Exchequer has replied to the speech he has made, but I should like to give a further reply in view of a question which the hon. Member had down on the Order Paper for to-day. I will read it to the House:
Colonel Wedgwood,—To ask the Chancellor of the Exchequer, whether the debt owed by Great Britain to America is additional to the sum of about £8,000,000,000 at which the National Debt, approximately stands, or whether it is included in that figure.
The hon. and gallant Member delivered a speech of about 40 minutes' duration and gave various figures with regard to the Railway, Sugar and Wheat Commission and many other figures. I must say I cannot understand any hon. Member who has really studied his subject asking a question like that. The hon. and gallant Member also asked what was wealth. Perhaps I may tell him what I consider it is. I divide it under three heads: first., physical wealth, that is to say, our harvests: secondly, the wealth of labour; and, thirdly, the wealth of credit. If the hon. and gallant Member understood the wealth of credit he would be the
last person to advocate a capital levy. If there is one thing we have not got in this country sufficiently at the present time it is capital. The hon. Member for the Spen Valley (Mr. Myers), who followed the hon. and gallant Member, referred to various issues of capital recently made. They, however, do not represent wealth. These issues were made because the bank rate is low, and investors can get more interest by investing in such securities as the Anglo-Persian Oil Company, and the other investments mentioned. This Budget has been called a gamble. The right hon. Member for South Molton (Mr. Lambert) further stated that the Chancellor of the Exchequer had budgeted for a deficit. I do not think that anyone who looks at the figures and studies them and realises what is meant by cheap money, could think that we are budgeting for a deficit unless something unreasonable occurs.
Take one item, the Consolidated Fund Services, which are made up of the National Debt Services. I should like, with the permission of the House, to give a few figures to show how very conservative the. Chancellor of the Exchequer is. In fact, he might be called ultra-Conservative seeing that in these days we want courage to help our traders. These are the figures to which I wish to refer. The estimate for the National Debt Services for 1921–22 amounted to £345,000,000. The actual amount for 1921–22 was £332,000,000, or a saving on the year of £13,000,000. This year's Estimate—for 1922–23—is £335,000,000, and in that is included the debt due to the United States of America, £25,000,000, which, if deducted from the £335,000,000. gives a total of £310,000,000. The difference between that and the actual amount for 1921–22 is £22,000,000. One item in the National Debt Service is that of Treasury Bills. Let me again, if I may humbly do so, congratulate the Chancellor of the Exchequer on acting on the tender system. He has saved this country millions by issuing these Treasury Bills by tender. Roughly, our Treasury Bills are down £300,000,000 in the twelve months. The interest on that £300,000,000 alone represents over £10,000,000 a year, and, if you take the difference between what the Chancellor of the Exchequer is paying in interest, you find that he is now
paying £2 5s. 2d. per cent., whereas 12 months ago he was paying £5 13s. 1d. That is a difference of £3 7s. 11d., and, if you look at the average over the whole year, you can take it, on the most conservative basis, that the interest paid on Treasury Bills is at least 14 per cent. less than it was 12 months ago. That alone comes to £14,000,000, and with the £10,000,000 which I have just mentioned, makes a reduction of £24,000,000 due to cheap money. Another point to which I should like to refer is with regard to the depreciation fund. When the War Loan and the Funding Loan were issued, a depreciation fund was arranged, so that, when the stock went below the issue price, one-eighth of 1 per cent. was to be purchased monthly as long as the stock was below the issue price. I have here the White Paper dealing with the National Debt. It was issued in 1922, and is dated 31st March. 1921. That. is for last year, and to show the large amount that is involved I should like to quote from it. It says:
Twelve monthly payments of £2.660.022 6s. were made to the National Debt Commissioners on account of the Depreciation Fund in connection with the 5 per cent. War Loan, 1929–47, and the 4 per cent War Loan, 1929–42, established in compliance with Section 32 of the Finance Act, 1917, making, with the balance of £8,589,390 8s. 8d. in hand on the 31st March, 1920, and £386,053 18s. 10d. received for interest, a total available of £40.895,711 19s. 6d. Of this sum £31,771,001 11s. 3d. was applied in the purchase and cancellation of £37,495,000 5 per cent. stock, leaving £9,124,710 8.s. 3d. in hand at 31st March, 1921.
This Depreciation Fund must be a very great saving to the Government, because the War Loan and the Funding Loan are above their issue price, and, if you estimate on a conservative basis, there should be a saving in 1922–23 of about £25,000,000. There are also the Death Duties. Owing to the rise in these Government stocks, the Chancellor of the Exchequer will not have so much stock handed to him for Death Duties, and will not have to pay the difference between the par value, at which some are handed to him, and the market price. A very conservative estimate should show under this head a saving to the country of at least £8,000,000 in 1922–23. Adding all these three figures together, we get £57,000,000, of which the Chancellor of the Exchequer has allowed for £22,000,000. That leaves a balance of
135,000,000, which is £10,000,000 more than the interest payable on the United States debt. Besides that, there is the Excess Profits Duty, of which, at the end of March, there was £296,000,000 outstanding. The Chancellor of the Exchequer, in his Budget for 1922–23, is allowing for £27,000,000 of this to be paid over a period of five years, with interest at 5 per cent. without deduction of tax. That is really equal to 6¼ per cent. Taking it on a 5 per cent. basis, the interest on that would be £13,000,000 alone. There are several other matters, such as Income Tax and Supertax, the amount carried forward on 31st March being £146,000,000. The Chancellor of the Exchequer is estimating for £320,000,000 this year. Supposing that lie got in the amount due at the end of March, as We sincerely hope he will, it will mean that he will only have to collect 1183,000,000 during 1922–23. He also has—which I think shows the conservatism of his Budget—the pension capitalisation to consider, and, further, he has possible reparations and possible Allied debts. I put down a question quite recently as to whether Czecho-Slovakia was going to pay her debt, after issuing a loan in this country, and I understood that she was going to pay £2,000,000. That will all assist in strengthening the Budget. Moreover, the Civil Service war bonuses may come down, and that also will help. I am all for a conservative Budget, especially in the difficult times which may be ahead of us, but I do think that, with the continued blessing of peace and a system of preserving economy, the public credit of the country was never better and should continue to hold that splendid position.

9.0 P.M.

Mr. W. GRAHAM: On this occasion we have only one day for the discussion of the Finance Bill, and I think that, in justice to other Members of the House, we must as far as possible try to put our points as shortly as we can. With that in view, I propose simply to raise one or two of the leading questions in connection with the Bill as we see it from the Labour benches. During recent weeks there has been a great deal of criticism of the Budget on the ground that it was unduly generous to the wealthy or well-to-do classes, and I think it is our duty in the House of Commons to ask frankly whether there is any ground for that assertion.
The people of this country are broadly familiar with one or two outstanding facts since 1914. They remember that our national indebtedness before the War broke out was in round figures £650,000,000, and they know that the national indebtedness to-day is about £7,000,000,000. They also know that in pre-war times we used to raise from the whole of our taxes about £200,000,000 per annum, and that we are now raising £900,000,000 or £1,000,000,000, that is to say, five times the pre-War figure. They are also told by economists and others that the taxation per head in Great Britain has arisen from about £:l before the War to about £21 or £22 at the present day. All these statements burn themselves into the minds of the masses in public debate, and they are beginning to appreciate the real burden, if I may so describe it, which that very great change involves. Then, having got these facts tolerably well together, they immediately ask themselves what call has been made upon big business—if I may be forgiven for using that phrase—or upon those who made large sums of money during the War. Have we called upon these people for any large contribution in proportion to the undeniable opportunities of wealth-making which they have had during that time? Let us coldly and impartially, and without any desire to make party capital, examine that side of the picture. The truth is that we in this country have not embarked upon a capital levy of any kind. I make that statement for the moment subject to qualifications which I will introduce later. We certainly have not had the capital levy which has been introduced by other countries whose financial position is after all not so good as our own, and whose needs were certainly very great. That is the first thing that well-to-do people in this country and the wealthy classes have escaped.
Then there was introduced the Excess Profits Duty, which, it was held by many of its defenders, did go a long way to meet the kind of exceptional gains which certain sections of business were; making during the War. Many of us on this side of the House never defended the Excess Profits Duty as a fiscal device. Speaking quite for myself, but I think also for many others, I question if a more mischievous tax, from a fiscal point of view, was ever introduced. It was thoroughly unfair in its incidence. It was capable of wide-
spread evasion, which, in fact, took place. It. was from every point of view an undesirable impost. But a very large sum of money was collected under the Excess Profits Duty, and then there came an arrangement in recent times by which it was possible to claim repayment in respect of losses or deficiencies. The truth is that at present a very large part of the Excess Profits Duty has been repaid, and one of the most lamentable points about that repayment, of which I think the House of Commons is bound to take note, is that because of inadequate staff in the Inland Revenue Department it is not possible to examine so closely the claims for repayment as should have been done in the interests of the State, and probably large sums, I am afraid, have been repaid—the Inland Revenue have had no other choice—which on a strict reading, would have been in the coffers of the Treasury at this moment. There is high authority for that statement. That is the second point which I think the masses of the people have in mind.
There has been, in the third place, no special levy or charge upon war gains as such. I mean on the lines which were suggested by the inquiry conducted by a Select Committee of this House. That Committee reported that there were at least £4,000,000,000 of unmistakable war gains, and the evidence tendered by the Inland Revenue authorities was that a scheme of taxation, or appropriation of part of it, was possible if the State so desired. That Report was put in the waste-paper basket, no action was taken, the Excess Profits Duty began to be repaid, and I think a very unfortunate impression was left upon the minds of millions of the electors. They took the view, while they themselves admitted that they had participated in some of the gains, that a certain section of the community—I do not blame them specially for it because much of the wealth was automatically made—had profited unduly by the terrible experience through which this country passed, and that it was our duty to appropriate at least some portion of that gain in order to render unnecessary and impossible the terrible kind of Finance Bill with which the House is confronted to-night. These facts are very clearly in the minds of the
people when they consider the present taxation.
But is it unjust to press a little further the kind of social conditions in which this Finance Bill is introduced, and ask whether the relief given in it is quite fair to all sections of the British people? I have often been told as a young Member that there is no assembly so just and fair as the House of Commons if you state your case frankly, whether it agrees with you or not. Let us view this situation among the masses and expose it to the test of the distribution of relief under this Bill. I agree that for a year and more after the War concluded economic conditions were on the whole prosperous, artificially prosperous no doubt, but still prosperous, and that led large numbers to believe that we were going to pass through our post-War experience without any great dislocation of industry or trade. The slump has come, and during the past 18 months, or less, a sum equal to at least £500,000,000 per annum has been deducted from the wages of from 7,000,000 to 10,000,000 of British workers. I admit, of course, that profits and returns and everything else have fallen in the same period, but there you have a block of seven to ten millions of people who have suffered undeniably during that period to the tune of £500,000,000 at least per annum. That would seem to indicate that that class of people should receive special consideration in the Finance Bill if strict justice is to be done to all the people as far as British finance is concerned.
We find, on the other hand, that a very large part of the relief afforded under this Bill goes to farmers and to other sections of the community, but is not directly and immediately traceable to the seven to ten millions of people I have described. No doubt they will get the indirect benefit of any improvement in trade that the reduction of Income Tax and the rest brings. But as to any immediate relief they are undeniably at a serious disadvantage under the present proposals of the Chancellor of the Exchequer. What do we do in this Bill to meet that situation? My hon. and gallant Friend the Member for East Newcastle (Major Barnes) drew attention to the comparatively small amount of relief that is afforded to the humbler Income Tax payers, and showed that on an income of about £500 the relief under this scheme would be little
more than a few pounds at the best. But the seven to ten million people I have mentioned are very far below the £500 limit, and quite apart from that, we know that under the existing system of Income Tax a man may have a wife and three children and some small insurances and have anything between £350 and,E400 per annum before he is liable for a copper of Income Tax at all. These conditions of even small Income Tax payment do not obtain amongst these millions of people to-day, and the result is that, apart from the indirect benefit of the reduction in general taxation, they must depend upon such relief as is given in indirect taxation. That relief is confined to the £5,000,000 or so represented in the concession on the Tea Duty. My conclusion therefore is that it is altogether insufficient, and that goes a long way to justify the criticism that the allocation of relief under this Finance Bill is unfair, and is out of keeping with the very hard social conditions in which millions of people, through no fault of their own, find themselves to-day.
The other point to which I want to refer is the proposal under this Bill to place on a basis of one year's rental the assessment to Income Tax of farmers and others using land. I refer to it here because of the definite recommendations on that point which we made in the Report of the Royal Commission on the Income Tax. This basis of assessment for farmers has continued, as far as I remember, practically from the earliest time of Income Tax in this country, and in other days it was defended on certain grounds which I think no Member of the House of Commons would plead with any great force or conviction to-night. It was argued that there was considerable uncertainty about farming, that farmers did not or could not keep accounts, and that the whole occupation was one from many points of view of such a precarious character that it would probably be fair to take the annual rental as a kind of basis for Income Tax purposes. The original proposal was one-third. Passing through intermediate stages, it was raised to, I think, once, and then twice the annual rental, and now the Chancellor of the Exchequer proposes to go back to once the annual rental, because of the difficult times which have recently over taken British agriculture. I make no criticism whatever of that proposal from
the point of view of existing conditions, but I say that the whole basis of assessment to Income Tax as represented by this proposal applying to farmers is thoroughly unsound.
The Royal Commission examined this at very great length. That Commission included one or two men eminent in agriculture in this country, and they recommended unanimously that after due notice had been given the farming classes of this country should be put on the ordinary assessment under Schedule D, that is, on their profits from time to time, and that that was not only desirable in the public interests but fair to other trading and producing classes in the community. What happens at the present time? They have, of course, the choice of assessment either of double or of once their annual rental, or an assessment on their actual profits under Schedule D. As times are prosperous or bad, they oscillate between the double rental or the single rental, and the assessment on ordinary profits. While there may be a certain cheek on the rental basis which their Inland Revenue authorities have, and which they can apply, it is practically impossible to say in this country at the present time that we have fairly taxed the farming community. I am not suggesting that farmers as a whole want to avoid their taxes. I am only suggesting that this is a bad basis, and that it was condemned unanimously by the Royal Commission on Income Tax.
There is another element in the situation. It has been pointed out that many farmers to-day are occupied in different kinds of enterprise. They are not confined to the cultivation of the soil. There may be poultry, fruit and other enterprises connected with their farms or concerns, and it is very difficult to arrive at a true income and true profits in cases of that kind whenever you have this basis of assessment. My contention is that we should not, any longer than we can possibly help, perpetuate this method of assessing farmers, but that we should at the earliest possible date place them in the same position as other traders and producers, and ask them to take their place under Schedule D on profits, with the usual assessment and abatements to which other producers and traders are subject. That was the unanimous recommendation of the Royal Commission.
The only proviso they added was that due notice should be given, and I suggest that the Chancellor of the Exchequer should, before the Finance Bill leaves the House of Commons, give that notice if he agrees with the recommendation of the Royal Commission.
Some hon. Members have described this Budget as a gamble. They mean by that that we are taking our chance by reducing the Income Tax and sacrificing £50,000,000 or £60,000,000, and temporarily we are suspending our provision for the repayment of debt. What is our view of that proposal on these Benches? Over and over again I have heard my right hon. Friend's predecessor in office say that it was one of those undeniable canons of war finance that we should seek to pay off as early as we possibly could the debt that we incurred during the War, and that as far as possible we should seek to repay in the terms of depreciation, so to speak, in which we accumulated a very large portion of it. I do not think the House can contend that we have been faithful to that principle in the present Finance till. I want to be perfectly fair, because if there is one thing that demands a cool head, it is British, or, indeed, any finance. What is the question which the Chancellor of the Exchequer puts to the House? I assume that he agrees to that principle. He says, in effect: "I are confronted with very great depression in industry and commerce, and I am going to take my chance of reducing the taxation immediately in the hope that it will contribute to some extent to that trade revival which will make it possible for me to do more in succeeding years in the way of debt redemption than I could do if I strangled industry and commerce by high taxation now, and made it impossible for it to recover."
On that point I should like to say that there are many who believe that it is a very risky experiment. Suppose trade and commerce do not revive, and suppose we have sacrified this taxation. That would seem to point in the coming year to more borrowing, and with that to more inflation and to higher taxation and all the other diseases with which we have been painfully familiar during recent years. I prefer to build on the alternative. There is over practically the whole world at
the present time, in nearly every country, the first faint sign of some coming trade revival. It is pronounced in some parts of American enterprise. It is found in many parts of Continental and other development, and I think, even in this country, our tendency is in the right direction. Accordingly, I appeal, as far as I possess any small influence in these matters, to all sections of people not to decry the effect of this small reduction in taxation, but, rather, to emphasise the psychological gain, if I may so describe it, which will come from it, and to do everything in their power so to build up industry and commerce that this experiment, risky as it is, will be justified, that our financial position will gain in years to come, and that by and by we shall be able to address our minds to those great social and other causes which arc, unfortunately, because of our condition, postponed to-day.

Mr. DENNIS HERBERT: I will confine my remarks to a few points of criticism of a Budget of which, on the whole, I approve, and I will ask the Financial Secretary to consider them before the Committee stage of the Finance Bill. I wish to deal with the Sections relating to the question of the avoidance of tax, and with regard to Section 14, and to add to what was said by the right hon. Baronet the Member for Moray and Nairn (Sir A. Williamson). I have every sympathy with the Chancellor of the Exchequer in wishing to hit what one might describe as the least conscientious of those men who are getting out of payment of Super-tax by means of the formation of these particular companies. The right hon. Baronet has already drawn attention to the way in which, in an endeavour to catch that particular individual, the Chancellor of the Exchequer is going to lay under a serious hardship a very large number of the comparatively small shopkeepers in this country who carry on their businesses as limited companies. May I point out to him, however, that the man who he is particularly trying to hit, if I are not mistaken, can and will keep out of this in the very simplest way possible? There are places in the world where joint stock companies can be registered, where there is not a big taxation on the income or profits made by these companies. The first thing that such a man will do will be to reconstruct and register his company as a foreign company instead of in this
country. Not only will he by that means get oat of this attempt to saddle him with the Super-tax, but it will also remind him of what he did before the Act of 1914, when there was a regular system of what was known as savings banks accounts in Canada; the money which he hands over to this trust company he will probably invest in foreign securities, and he will thus take that money away from this country and those investments will not pay British Income Tax. I confess that, with every wish to see that got over, I do not see how it can be done, but so hardly may this Clause work that I feel perfectly certain it will be avoided, even by other means if necessary than that of registering the company abroad.
There are many ways in which men, wishing to build up a fortune for their children or something of that kind, can get out of this particular Clause by subscribing to such a company as will be formed directly this becomes law. They will form a public investment trust company, which will confine itself to investing all its capital in high-clase trustee security, and will provide that it pays only comparatively trifling, if any dividends at all. That being a public company with a very large number of shareholders, it will be entirely outside this Clause. There is one hardship under this Clause which I want to point out if the Chancellor were to persist in it, which I. sincerely hope he will not do. What is meant by
reasonable proportion, regard being had to the normal requirements of the business"?
There you find an example of the evil of a particular Clause of this kind, where you have to have an inquisitorial system, with all the power vested in some individuals who will say whether one particular member shall be taxed on certain grounds and if another particular member shall get out of being taxed on certain particular grounds. You are, in effect, leaving it to a body of referees to decide, according to their own sweet will, to what particular extent a particular man should be taxed. But the only thing, apparently, to which regard is to he had is the "normal requirements of the business." I would ask the Chancellor of the Exchequer to say whether the "normal requirements of the business" is intended to cover and include the building up of the sinking fund to replace wasting
capital? I can tell the Financial Secretary to the Treasury that I believe I formed for a. client the first company which was formed in this country for the purpose of avoiding Super-tax. It was formed the moment Super-tax was first brought in, and as a result of what I have always thought to be the one unfair and inequitable position with regard to Super-tax, namely, that is that it allows no deductions whatever, however reasonable. This was the case of a man who had an income of £40,000 from a wasting security, which had cost something between 2250,000 and £500,000, and the life of which was estimated to be only seven or eight years. It was nothing short of sheer robbery to calculate the tax as if the whole of that were income. As a reasonable man, all he could do was to treat about £5,000 out of the £40,000 as income and to put the rest aside to meet the wasting capital assets.
I wish to say a word or two on Clause 13, with regard to settlements which are not to relieve the settlor from liability to Income Tax. If it is not too early to do so—I do not want to go into Committee points—while thanking the Chancellor of the Exchequer for the alterations which have been made since the Budget Resolution, I would call his attention to one or two further points which might reasonably be met with regard to Sub-section (3). That is the case of income which is settled upon a child in his infancy, and it is provided that in order that it should be free from tax in the hands of the settlor it must be settled for some period not less than the life of the child. I suggest now, as I suggested in the Debate on the Resolution, that a provision for determination of the interest of the child on bankruptcy or alienation should not. be construed to be determination within that period; and it might be allowed to be determined, not merely on the death of the child, but on the death of the settlor of the money, because many a man is trying to make provision for his children, not out of capital which he already owns, but out of money which he is making, because he has no other means of providing for them. I know of several cases in which, before any question of avoiding Income Tax arose, men entered into commitments to pay certain sums out of their income for the benefit of infant children so long as they lived, and so long as the man himself
lived, but it would be quite impracticable for him to saddle his estate and executors with the burden of making those payments after his death.
There are only two other points to which I wish to refer. One is the Corporation Profits Tax. I do not wish to add to what has been said on that subject more than to put in my plea, in addition to those of other hon. Members, that this most industry-hampering tax should be got rid of as quickly as possible. If the Chancellor of the Exchequer really wants, as I am perfectly certain he does, to revive industry in this country, I honestly believe he would have done quite as well if he had taken off the Corporation Profits Tax as by taking 1s. off the Income Tax. It would cost him less and he might have applied further relief in some other direction. So far as the mere question of the revival of trade and industry is concerned, he would have done quite as much to help in that way as by merely reducing the rate of Income Tax. My last point, upon which I have to make a criticism, is one which I have not heard referred to to-night. It is the question of the tax on beer. I make this suggestion very seriously indeed. To my mind, the Beer Tax is not in the nature of a luxury tax. Brewed as it is now, with the heavy taxes on it, it takes a larger amount of beer than most working men can buy to make them drunk. It is looked on by the ordinary working man, who is not a the to taller, as quite as much a necessity of life as tea. In fact, more so, and the addition which the price of beer makes to the working man's bill is much bigger than the addition made by the tax on tea. Taking his view that it is a necessity of life, it is the one necessity of life on which the tax has been increased far more highly than the Tea Tax or any other of the taxes, and it is the one tax on which there has been no reduction whatever.
But the serious part of it from the point of view of the rest of the country is this, that the working man who drinks beer in the ordinary way looks upon this as a thoroughly unjust tax, and it is an injustice which tends to cause unrest among the working people of this country, more than any other alleged injustice in the whole realm of taxation. It may be too late to do anything this year, but I do
earnestly urge upon the Chancellor, and all the others who may be concerned when the time comes, that the greatest possible effort should be made to reduce that tax next year. If the tax be reduced by £1 per barrel, the price of beer to the consumer will be reduced by ld. a pint, and that reduction will not be borne entirely by the State, but will be borne to a considerable extent by the brewer. It is not the brewer's fault at present that he is making big profits because of the big taxation. While there is an enormous production sold in very small quantities, the brewer naturally says, "I am not going to sell at a loss," and with a difference of ld. or a halfpenny on the small quantities sold, in the present state of affairs he gets a higher profit—I was going to say higher than he wants. At any rate, he is prepared, I believe, to provide something like 50 per cent. of the cost of a reduction of ld. a pint if the State will provide the other half by the reduction of £1 per barrel on the duty.

Mr. G. LOCKER-LAMPSON: Reading through this Bill I am very glad to see that at last the Chancellor of the Exchequer is dealing with the very important question of evasion. The hon. Member for Watford (Mr. D. Herbert) said that in one or two cases the Clause in regard to evasion would probably have to be amended. I think that that is very likely to be the case, but I am glad to see that the question of recoverable trusts is going to be dealt with, that under Clause 13 what are called single-man companies are going to be dealt with, and also that under Clause 15 the law is going to be very much strengthened in regard to sending in particulars of deductions for Super-tax, because, clearly, under the present system, people who do not wish to make proper returns return all sorts of reductions in respect of repairs, very often repairs that are anticipated, and that have never yet been effected at all. Therefore I hope that in the interest of the taxpayer who makes proper returns the Government will continue every single year in every Finance Bill to deal with this question of evasion as it comes up.
I wish to deal with two points which' have not been touched upon. The Chancellor of the Exchequer proposes certain Clauses which, I think, inflict a great deal of injustice upon various sections of the taxpayer. He put down Clause 11
in order to deal with the ruling of the House of Lords in respect of income assessed under Schedule D, a tax on such things as War Loan, for instance, on which the tax is not deducted at the source. Recently the House of Lords gave a ruling that, in respect of the man who had sold out and was no longer earning an income, he need not give the previous year's assessment. That, of course, meant great loss to the Exchequer, because it meant that in the last year in which he was getting income practically he paid no tax at all. To meet that case the Chancellor of the Exchequer has put down a Clause providing that in the first year such a person is to pay on the actual income, and thereafter he is to pay on the previous year's assessment, but this is going to entail a great deal of hardship upon the taxpayer. Take, for instance, a man who has bought £1,000 worth of War Loan, say at 5 per cent. In the first year of the purchase say he gets £25 interest, and in the second, third, and fourth years he gets his full £50, and in the fifth year he sells out, so that he only gets £20 interest. Taking that time, we find that his interest amounts to £235, but under the Bill as it stands he will actually pay £265. This can easily be remedied by the Chancellor of the Exchequer modifying his Bill a little bit by saying that such a man will pay on the actual income, and in the last year when he sells out he shall pay on the actual income of that last year, whatever that income may be.

Mr. YOUNG: I think that that will be unnecessary.

Mr. LOCKER-LAMPSON: I think that I understand my hon. Friend's interruption. He will say that there is already a concession, though it is not in the Bill. I believe that there is a concession given by the Inland Revenue, but the whole lot of these concessions are merely memoranda sent out to the inspectors, instructions from the Board of Inland Revenue. It takes experts under the Income Tax law very often months to find out what these concessions really amount to. For the ordinary taxpayer who has not all these papers at his disposal it is impossible to find out what these concessions are. I would suggest that these concessions should be made in the Act. They should be put into the Bill, and at the same time, I think that they ought to
be made applicable to interest from foreign possessions and securities outside the United Kingdom. That is one of the suggestions which I hope the House will have to consider. Under Clause 12 of the Bill all employments are to be placed under Schedule E instead of under Schedule D as at the present moment. This, again, I believe is going to act very unfairly to a very large section of our population.
Take many people such as commercial travellers and bank clerks. They have a fluctuating income. They get commission and bonuses. Every time until now they have been taxed under Schedule D on the three years' basis, and a very wide latitude has been given to these people in respect to the assessment. The practice has varied in almost every part of the country. Sometimes they have an average of salary plus the commission or an average of commission only where they do not get any salary. Or you find that it is the salary of the actual year plus the commission of the previous year or sometimes perhaps it is the salary of the actual year plus an average of the commission over the three preceding years. The very fact that this practice is varied throughout the country under different managements, shows the impossibility, when you have a fluctuating income, of being able to say at the beginning of the financial year what your income is to be for the rest of the year. Under the Clause of the Bill as it stands, they are obliged to guess what is to be their actual income of the year. Either the taxpayer guesses too little, and then the Exchequer loses, or he guesses too much, and then he loses, and has to make a reclaim at the end of the year. Under the Bill you say that he is to give his income for the actual year under Schedule E, but in any event, if his income is fluctuating, he cannot do otherwise than give his income of the preceding year. It seems fairer and simpler to enable all these people to calculate their incomes on the income of the previous year. The other day the Chancellor of Exchequer turned down several suggestions for reform on the plea that he had an insufficient staff. I have no doubt that that was a very good reply to give. But if this Clause goes through it will mean more work, more staff, and more cost in the long run to the Inland Revenue.
I want to support what was said by my hon. Friend the Member for Central Edinburgh (Mr. W. Graham) as to Clause 16 and farmers' profits. I think he made a very good case. Farmers' profit is now to be taken on the single annual value. I maintain that it is not fair to the rest of the community. I am not in the least hostile to the farming industry. I happen to be a landlord with tenant farmers, and I have the farmers' interest at heart. It is not fair to the rest of the community to treat farmers upon an entiraly different basis from the rest of the taxpayers. Farmers already are preferentially treated. If in any year their actual profit is below their assessment, they have that amount deducted from their assessment, and they are assessed on the lower figure. They have their assessment reduced to their actual profit, and it is a privilege which is enjoyed by no other class. Moreover, if their profs is in excess of their assessment, they have not to pay on that excess profit. The business man, who is assessed on a three years' average, has to stick to that average, although no profit has been made at all in the actual year. I cannot see any reason for this whatever. Take two men. One is a farmer and the other a business man. The farmer's assessment is £1,000 and the business man is assessed at £1,000 as his three-years' average Suppose they drop £500 of the profit, and each in any one year has only £500. The business man has still to pay on £1,000, but the farmer has his assessment reduced to £500, and he pays only on that sum. If neither makes any profit, the farmer's assessment is wiped out altogether, and he pays nothing, but the business man has still to pay on an assessment of £1,000. There is no justice in it.
I am not arguing that you should take this privilege away from the farmer, but you ought to grant it to the business man also. It has been argued that the farmer does not keep books. But a lot of small traders have not kept books in the past, and now they are being forced to keep books, with the result that their assessment is raised almost every year and they do not know where they are. It has never been suggested that farmers are more illiterate than traders. The real reason, I believe, is that the farmers are a very well organised body. They went to the Chancellor of the Exchequer and put
their case, probably very fairly, and he accepted that case. The small trader has no organisation. He went, too, to the Chancellor of the Exchequer, but was not able to get the same terms. During the War the farmer entirely escaped the Excess Profits Duty. That was preferential treatment again. It is not as though the farmers have been doing really badly. I know of a case of a farmer in the North of England who, during the last three or four years, has made four times his annual value in profit, and he has been taxed only on the double annual value. I have not spoken in any hostile spirit to the Bill, but I thought it right to make these points, and when the Committee stage comes, I hope the Chancellor of the Exchequer will consider them.

Lieut.-Colonel WHELER: I would like to take up a sentence or two to which the hon. Member for Central Edinburgh (Mr. W. Graham) gave utterance in his interesting and important speech. He was speaking with reference to the benefits which he held that certain sections of the community had secured in comparison with others. He illustrated the fact that this country had had no capital levy, so he said, and therefore, as compared with other countries, the richer classes had done well. The hon. Member was using what I call legal facts. I would ask him to consider the real facts. We had have a capital levy in this country far heavier than any other country. Our taxation per head has been such, as he knows, that there is not a single landed estate in the country where, if the owner wished to keep the estate in anything like a reasonable state of repair, he has not been obliged for the last three years to use capital to a very large extent. As one who has had to do that, I can give him that fact as a real fact. Such facts are worth a good deal more than legal facts, which may be merely true as utterances concerning the laws of the land, hut do not sometimes show the true state of the country as a whole and are not realised by a large number of people.
While I thank the Chancellor of the Exchequer, in common with all other agricultural Members, for what he has done for agriculture and the landed interests generally, I will point out that this year is a year of most serious and desperate difficulty for a vast number of
those who have bought farming land. What is so often forgotten is that you may have good rich land for fruit farming or special hop ground which may bring you in a large income, but if you take the vast majority of the farms in England to-day, the case is different. I could name farm after farm where there is a dead loss of over £1,000 to the farmer last year. Think of the present situation, with this beautiful fine weather. It is causing very serious anxiety in many parts of Eastern England to-day. No grass is coming on, and there will therefore be little hay. The turnip crop, already sown twice, is being eaten off by what is locally called the flea, and, therefore, unless something happens soon, there will be poor root crops and poor hay crops. The situation was bad this time last year, and the reserves of capital then in the hands of those men have now been eaten up. If you have a second year of that sort, however grateful we are for the concessions made to us as agriculturists by the Chancellor of the Exchequer, those concessions are not likely to save a very large number of the farmers of England from practically complete ruin, unless we get a bountiful year with crops of all sorts growing in abundance, so that there may be a good valuation for the farms and a lot, of stuff to be sold.
The situation, as far as land is concerned, is still in a very precarious state, and those who talk about this Budget as giving such a great measure of relief to farmers and putting the farmers on their legs again, are very wide of the mark. If they study the question carefully, and especially the position in regard to the different qualities of land, they will realise that agriculture is still in a very serious state. The hon. Member for Wood Green (Mr. G. Locker-Lampson) talked about Schedule D and the question of profits. I wish there were going to be profits, but I frankly confess I do not see any prospect of the profits of an ordinary farmer coming under Schedule D. The hon. Member seems to infer that farmers should be dealt with on the same lines as small business men who, he says, have no trouble in fulfilling the requirements under these Schedules. Therefore, he thinks the small farmer should be in the same position. The two things are entirely different. The forms dealing with relief of Income Tax on land are quite different
and are very complicated, and in that connection I would ask the Financial Secretary or the Chancellor of the Exchequer to once more look into the matter of the form which is now in use, because it is full of very intricate details, and even to land agents and others who have to deal with it, it causes an infinite amount of trouble. From the statistical point of view, I think it would be a benefit if it were simplified, because the returns and the necessary facts and figures would be compiled in a much more simple manner than is likely to be the case at the present time.
May I refer to the beer tax as it affects agriculture? I would join with the right hon. Gentleman the Member for Chelmsford (Mr. Pretyman) in making a plea to the Chancellor in this respect. The 'agricultural labourer has been passing through a very difficult time and has had great deductions in wages, through no fault of the farmer, who has not been able to pay. In many cases to-day they are hard put to it. At the same time, the agricultural labourer, working in the sun, has a right to a drink of beer, and yet he has to pay the enormous price which is now being charged. That is causing real irritation among agricultural labourers, who do not. understand the situation. It is difficult to make them understand that money is so badly needed for taxation and for the upkeep of the country. All he looks at is the fact that his wages have been reduced, and yet he is called upon to pay this high price. I do not know if it will be possible to do anything this year, but I hope the. Chancellor will bear it in mind, because this is a section of the community which deserves some consideration. The agricultural labourers do not take their beer in excess; to the vast majority of them it is a relief and a pick-me-up after heavy work.
10.0 P.M.
With reference to the Club Tax, the Chancellor last year said he would look into it and see what could be done. Club men generally have been looking forward with hope for some concession, and when one bears in mind the increase in the tax as compared with 1914, and the tax on the club as compared with the tax on the licence holder, one must realise that this is a grievance. I am not here to urge the Chancellor of the Exchequer to take any steps to-night in this matter, but I would ask him to say something on the subject to the people who, last year, were
led to expect that some relief would be possible. It is felt that there is a grievance, and if people have been led to expect a redress of that grievance, the matter should be considered and those peoples should be the first to receive some relief when this is possible. I should like to emphasise what the right hon. Gentleman the Member for Chelmsford said in reference to Clause 18 of the Bill, which deals with the extension of claims in respect of repairs and maintenance. I was also disappointed to see that, relief was going to be postponed for a year. I would point) out that there are a great number of houses just over the limit, and owing to the expense of repairs and the general difficulty of getting that sort of work done, and the way in which owners have been taxed, the work of doing repairs has been put off as long as possible. They thought they were going to get some relief for repairs honestly done in order to keep up the rental value of the house, and if they are not going to get this relief, then the work will be postponed. If the Chancellor of the Exchequer could see his way to alter this Clause so as to extend the relief, it. would have the effect of encouraging work of this character on a large number of houses. I am certain the effect of that would be good, because the work will be carried out and local men will be employed who at the present time are unemployed, but that cannot be done if no relief is given. I hope the Chancellor will hear in mind this point, which is, perhaps, of more importance than might at first be imagined.

Mr. NAYLOR: The comments of the hon. Member who has just spoken are somewhat discounted by the fact that the farmer has yet to be born who is prepared to admit that he is prospering in the agricultural industry. For generations farmers have been living on their losses, and the greater their losses the more prosperous they seem to become. My object in rising is to draw attention to what I regard as two important points in connection with the Bill now before the House. The first is the remission of the Income Tax, and the second is the suspension of the Sinking Fund. I want the Chancellor, if he will, to consider for a moment what has been called during
this Debate the psychological effect of this great National Debt of £7,000,000,000 and the psychological effect upon people who have to pay taxes of the £360,000,000 a year which has to be paid in interest on that Debt. I am opposed to the remission of the shilling Income Tax, because I think the burden is being taken from the wrong class of people. I believe taxation should have been taken off to a greater extent in regard to tea, which is merely a remission to working-class families of 2d. or 3d. per week. I would like to have seen it taken off sugar, coffee, cocoa, and even beer and tobacco before this 1s. was remitted to men who, in my opinion, are well able to afford to pay it. I have been taught, that to ignore the Sinking Fund is fundamentally wrong, and it is very few Chancellors of the Exchequer who have gone to the extent of remitting a portion of the Income Tax while at the same time making no provision for the redemption of the National Debt.
Not being learned in finance. I have taken the opportunity this afternoon of consulting some of the financial text books in the Library of this House, and I came across a very interesting, a very well written, and an extremely able book. I hesitate to mention the name of the author of that book, as it happens to be the name of a gentleman well known to Members of this House—Mr. Hilton Young. If the Financial Secretary to the Treasury has read that book—and I have no doubt he has—he will forgive me if I read these two extracts as bearing upon my criticism of the failure of the Chancellor to do what I consider he ought to have done, and that is to apply some of his surplus of 32,000,000 to part redemption of the National Debt. This is what our author says:
National debt is like a toothache. It is best of all not to have one, but if you have got to have one, it is next best to get rid of it as soon as you can.
I suggest to the Chancellor of the Exchequer that he should consult the Financial Secretary to the Treasury as to the best means of getting rid of his particular toothache. I quote our author again, on the question of the remission of Income Tax. He says:
Interest is paid by taking money out of the pocket of the taxpayer and putting it back into the pocket of the holder of Consols.

Sir T. POLSON: When was that book published?

Mr. NAYLOR: I think it was in 1917, which is sufficiently recent to make it a work that a Member of the House of Commons might be allowed to quote without fear of the author being contradicted, especially when the quotations are made in the presence of the author himself. What I want to put to the House is this, that the £6,000,000 or £7,000,000 that is paid in interest on the £32,000,000 by which the National Debt might have been reduced had the policy of the Chancellor of the Exchequer been different was surely worth saving, and the fact that Income Tax has been reduced this year makes it practically impossible for the Chancellor next year, whoever he may be, if the national finances demand a further increase in Income Tax, to be able to re-impose that shilling upon income. I am wondering whether the fact that the Chancellor of the Exchequer does not anticipate being in office this time next year had any influence upon him in coming to that decision. I acquit him of any suggestion of that kind. But the Chancellor of the Exchequer at least might have followed the example of previous Chancellors and adopted what I consider to be a sound financial course, and that. would have been to have liquidated in part the National Debt, even though he had to disappoint his friends the payers of Income Tax.

Sir GODFREY COLLINS: Earlier in the afternoon the right hon. Member for Moray and Nairn (Sir A. Williamson) argued with force that the present Income Tax laws tax capital not only in this country, but capital trading on the Continent, of America, and that this was unfair. The right hon. Gentleman gave one or two very striking instances of tie hardships that the present law entails, and if I may call the attention of the Chancellor of the Exchequer to the present amount of Income Tax in America.as well as in this country he may see fit, perhaps, during the Committee stage of the Budget to rectify that hardship. As the House knows, the present Federal Income Tax in America amounts to 1s. 8d. in the £, and an individual to-day in America pays £20 by way of Income Tax in comparison with an individual in this country who is paying to-day from £118
to £143. An individual whose income in America is £2,000 pays £104 by way of Federal Income Tax. In this country he is mulcted from his income of the sum of £343. I have but to mention these figures to show the extraordinarily heavy taxation imposed in this country in comparison with America. I do not suggest for a moment that the two countries are directly comparable, but traders to-day in America and here are competing against each other in the neutral markets of the world, and any taxation, whether by direct or indirect methods, which hampers our traders in South America, China, Japan or South Africa tends to handicap them against the individual in America who is only paying these small amounts by way of Income Tax.
I know the Chancellor of the. Exchequer himself, before he came to this House, was a strong supporter of a tariff method of raising revenue. It is rather striking that the revenue raised by way of Customs Duty in America during the last 15 years has not increased. The amount to-day raised in America by way of Customs Duty is very much the same as it was 10, 12 or 15 years ago. The experience of the War has clearly shown that Customs Duties do not stand the test of war, and our fiscal system, built as it has been on the policy of free imports, and our direct taxation, based upon ability to pay, have stood the test of war and come through that extreme period. Hon. Members from one or two quarters of the House this afternoon have argued that the taxes on landed property are too great to-day. It is quite true that all taxes are too heavy, but while one or two hon. Members were pointing out that the landed proprietors are only able to maintain their estates in a certain degree of efficiency by the expenditure of capital, I recollected that to-night there are a million and a half people out of work, and if indirect taxation had been lower it would have been a direct benefit to a large number of people. I think there has been in this Budget undue relief granted to the direct taxpayer, in comparison with the relief granted to the indirect taxpayer. For every £1 by way of relief given to the indirect taxpayer, £6 has been granted to the direct taxpayer. It is true that the proportion between the direct and indirect amounts levied by way of taxation to-day is, roughly speaking, 61 per cent. direct and
39 indirect. These percentages correspond very accurately to the basis before the War. [HON. MEMBERS: "No!"] I think an investigation of the amount paid by way of direct taxation and indirect taxation before the War will show that 60 per cent. of our revenue was raised by direct taxation and 40 per cent. by indirect taxation before the War.

Mr. MACQUISTEN: It is the other way about.

Sir G. COLLINS: The reason why direct taxpayers think they are unduly burdened to-day is because of the large amounts taken out of their pockets. They believe, quite rightly, that direct taxation is too heavy, and they think that the burden is unfair in proportion to the burden placed upon indirect taxpayers. But the percentage of burden is the same. The result is due to the excessive burden placed upon all classes of taxpayers by the policy of His Majesty's Government. During the Budget Debate on the Committee stage and the Report stage there was a very general impression created, not only in the House of Commons, but throughout the country, that the Debt had been largely reduced. I think, after the Debate of this afternoon, that myth has been completely exploded. It is quite clear now that the National Debt in the last three financial years has only been decreased by £21,000,000. On the other hand, as my right hon. Friend the Member for Paisley (Mr. Asquith) pointed out, with the assent, I think, of the Leader of the House, £800,000,000 of capital assets have been sold and realised during that period. What is the result of that policy? There is to-day, and will be in perpetuity, an Income Tax at the rate of 9d. in the £ as a result of the financial policy of the last three years. Five per cent. of £800,000,000 is £40,000,000. A shilling in the Income Tax, as the Chancellor of the Exchequer pointed out, represents £22,000,000 per year. £40,000,000 being 5 per cent. of £800,000,000, the nation to-day is poorer to that extent. If these assets had not been sold, or if these assets, having been sold, had been placed against the National Debt, the Income Tax for all time could have been reduced by 9d. in the R. This is the striking fact that the Debate this afternoon has brought out. The Budget itself is a problem of debt.
The question of debt, whether the international outlook or the financial outlook at home, all revolves round the question of debt Our debt—the question of reparations—clogs our policy abroad and creates feelings between nation and nation. So in our home policy the burden of debt is the main problem which the Chancellor of the Exchequer has to face. At this time, with the extraordinary burden facing the nation to-day and in the future, the Chancellor has not faced the problem. We join issue with him on this Budget, and say that he has not shown that proof of foresight which the people, after the extraordinary financial sacrifices which one and all have made, expected. He should have adopted the course of cutting down expenditure to enable the reduction of debt to be achieved.

Mr. HILTON YOUNG: The House will have observed that the course of the Debate has been that of somewhat anticipating the Committee stage of the Bill. So far from complaining of that, I very much welcome it. In the first place nothing could be more useful than an early realisation of what the principle issues in Committee are likely to be or of providing the Government with an opportunity of envisaging what are likely to be the principal objections to this or that Clause. At the same time I fail to observe any main issue or vital principles of this Finance Bill that the Debate has revealed since the speech of the right hon. Gentleman. As to the observations of the last speaker I should like to ask the House what is the use of considering the period of finance since the termination of the War, as if during that time there had been no exceptional war expenditure to meet? Surely that is not the way to maintain our debates in the region of practical commonsense? Everybody knows that war assets have been realised and they have gone towards meeting our annual expenditure. Everybody knows that if the annual expenditure had been less these war assets could have been used for the reduction of debt. Everybody, I hope, knows that our annual expenditure could not have been less in view of the immense remnants of liquidation left by the War. It was to meet these that these realised assets have been used. Then, again, as to this region of controversy between direct and indirect taxation, I cannot believe but that there is a great deal of artificiality about it!
The more one examines the incidence of taxation and the more one considers how it falls, the more firmly one becomes persuaded that the simple idea that indirect taxation falls upon the masses and that direct taxation falls upon the classes has absolutely no foundation whatever in fact, and that to attempt to maintain theoretical equality between direct and indirect taxation as one of the commandments for the maintenance of financial integrity is absolutely absurd. The situation is this. As the proportion of direct taxation during the War was enormously increased, now it has been slightly decreased, and I fail to see anything startling or revolutionary in that phenomenon.
Let me pass from these considerations to my particular task, which is to furnish such information as I can upon the various and more definite questions which have been addressed to the Government in the course of this Debate. To and fro during the Debate has cropped up the vexed question of the Entertainments Duty. It is not strictly or roughly accurate to say that the incidence of the Entertainments Duy is heaviest upon the cheapest seats, because it is heaviest on the seats which come somewhere between the cheapest and the dearest. As to that, let me say that no more in this case, than in any other is it true to say that the arrangement adopted is ideal or perfect. I think I may say that my right hon. Friend has always been willing to consider any suggestions whatever for the amelioration of the distribution of the tax in order to render it more easy to those who have to bear it. I think that undoubtedly I may say that is still the attitude of the Chancellor of the Exchequer, subject to this underlying condition that in such a year as this any alteration must be such as will not reduce the revenue yielded by this tax.
A strong appeal has been made for some intervention in favour of the art treasures of the country. It has been argued in the first place that there should be some legislation in order to prevent the vanishing of great art treasures from this country. Towards that appeal it is almost impossible not to feel sympathetic, because art treasures are a great national asset, the diminution of which it is ire-possible to witness without the deepest regret. This, however, cannot be raised as a revenue question. There can be no
question of raising any revenue at all worth considering in regard to the export of our treasures. The real purpose would be to prevent their export and not to raise revenue. It is therefore really not a perfectly relevant matter to consider on such a Bill as the Finance Bill, the purpose of which is to raise the revenue for the year. In the next place the question has been raised of grants for the purchase of works of art. Here again there is no purpose which, had we room to turn round, we would rather assist in the highest interests of the welfare of the nation, but I fear there can be no other answer in a year in which the evils of depressed trade and unemployment are so great, except that there can be no question of providing further money even for such a desirable object.
The question has been raised by several speakers and particularly by the Member for Buckrose (Captain Moreing) and the Member for North-east Derbyshire (Mr. Holmes) on the long-agitated question of the widespread evasion of the Income Tax. That is a matter which, of course, must always occupy the serious attention of any Government. I would call attention to the circumstances that this year, for the first time, we propose to make a long step in the direction of dealing with what is obviously the most dangerous form of evasion in these Clauses we are introducing into the Finance Bill to deal with the subdivision of income for the purpose of avoiding Income Tax, and the diversion of income to private companies for the purpose of avoiding Super-tax. We look forward to the opportunity to be provided by more time in order to deal with the more controversial recommendations of the Commission.
Let me pass on to another question raised by the hon. Member for North-East Derbyshire when he launched his now familiar but nevertheless always weighty attack on the Corporation Profits Tax. I do not suppose that even the most ardent admirers of the tax maintain that it is a perfect tax. Its imperfections have never been ignored; its features as somewhat of an excrescence on the more orderly growth of our ordinary taxation system have never been denied. Let the House recall the origin of the tax In regard to the theoretical justification for it, the hon. Member gave due weight to its justification as a supplement to the Super-tax
and its justification as a return for the privilege of incorporation. But what I think the House occasionally allows to fall into obscurity are the historical circumstances of its birth. It sprang up like a phoenix from the ashes of the Excess Profits Duty. Historically, it would have been too much to expect in the fiscal economic history of any nation that it should have been able to pass straight by one single step from a fiscal system, including the Excess Profits Duty, to a fiscal system which included no direct taxation on the pool of industry itself. It is not surprising to find, therefore, that the Corporation Profits Duty was the necessary birth in succession to that larger direct tax on industry—the Excess Profits Duty. The hon. Member for North-East Derbyshire raised a very interesting point when he referred to the circumstances that if the Budget Provisions are carried out, the Super-tax will henceforth fall on the profits of the one-man company, which will fall under the sweep of the provisions against the invasion of the Income Tax. There is there, apparently, a question for inquiry. Corporation Profits Tax was introduced as an alternative to Super-tax, and at first sight it may seem as though in this case there would be both Corporation Profits Tax and Super-tax, but I think the House will not expect me to say more at the moment than that that is obviously a subject which will need further consideration when it comes to be discussed in detail in Committee.
Let me pass to the interesting and somewhat difficult question raised by the right hon. Gentleman the Member for Moray and Nairn (Sir A. Williamson) and the hon. Member for Greenock (Sir G. Collins). They pointed out the discrepancies which result from our own provisions and the provisions of the United States as regards double Income Tax. It is not my intention to deny, and indeed it would be idle to deny, the difficulties and the hardship from the point of view of taxation which result to international or semi-international business from the clashing of Income Taxes which results in double taxation. We have dealt with that within the British Empire by provisions which were passed in 1919 or 1920, and with which the House will be familiar. This is the greatest difficulty in connection with these hardships and discre-
pancies, and the one which most urgently requires attention. At that time the Income Tax was specifically a British institution, and was most applied and highest in rate in this country and our Dominions, but the area of the difficulty has been somewhat widened by the provisions adopted in the United States, which are very much more attractive than ours. I would go so far as to say that, were we living in an ideal world, we might find it extremely convenient to adopt similar provisions ourselves, but what is the great difference? The great difference between the United States and ourselves in this matter of remitting double Income Tax is simply that in the fiscal system of the United States they can afford it, and in ours we cannot. In the United States the Income Tax is at a lower rate than ours, and therefore it is of less financial moment to them than it is to us. Moreover, in the United States the Income Tax is a new invention, and perhaps they are not quite so keenly alive to all the bearings of that tax as we are here. I think that possibly they are not so keenly alive to the loss of revenue which this provision of theirs is going to cost them, and, if I may venture to do a most gratuitously unwise thing, namely, to prophesy, I should say that it would seem to me to be far more likely, in the course of the coming year, that the United States will come to meet our provisions in this respect than that we shall go to meet theirs.
The right hon. Gentleman the Member for Moray and Nairn raised, also, some extremely interesting and important questions on the subject of the proposed provisions as to private companies. The right hon. Gentleman was afraid that the net of the Clause was swept too wide, and, as he argued the matter, it did seem to sweep too wide, but I believe that his fears are really groundless. While giving due emphasis to the provision that only those companies are to be caught in the net which have less than 50 members, or make no public issue, he did not pay due attention to the further provision, which is the most important of all, that only those private companies are to be troubled by this Clause which do not make a reasonable distribution to their shareholders in the year. That is the bedrock condition in the case of those companies to which the right hon. Gentle-
men was referring. Companies candidly aridbona fide formed for carrying on businesses, and which make a reasonable distribution of their profits, will not be troubled by the provisions of this Clause, but only those companies which do not make such a reasonable distribution. I am confident that the intention and effect of this Clause is that only those companies will he troubled which indeed are grossly and obviously formed with the intention of evading the provisions of the Revenue Laws. Such is the intention. Such, I believe, will be the effect. It will be a matter for discussion in Committee as to whether that intention is secured, and will result from the provisions of this Clause. On the arguments of the hon. Member for Watford, I failed to follow why he found it necessary to advance such uncompromising opposition to the Clause. His argument, I thought, would have warranted rather a less vigorous opposition to the spirit of the Clause in any case, and I cannot doubt that when he comes to examine its exact provisions he will find himself in better agreement with its spirit. Let me take the point as to foreign registration, and assure him that his fears, I believe, are entirely groundless. Evasion of this provision by foreign or Colonial registration is practically impossible in practical working. The Clause could only be evaded by foreign or colonial registration if the practical administrative control of the affairs of the company were transferred to the foreign country or Colony. You could not transfer the administrative control of your company to Queensland by sending out instructions to register your company in Queensland.

Mr. D. HERBERT: It can be controlled by a solicitor in Queensland.

Mr. YOUNG: Control by a solicitor will not be accepted by any tribunal as practical administrative control. The truth is that that form of evasion would only be available to those who were prepared to make their headquarters in these foreign countries or Colonies and settle there in order to administer their companies. That leaves the question remaining as to what is a reasonable distribution of profits under this provision, and the hon. Member gave a single instance. Of course, upon the actual circumstances of a single case it is impossible to make a statement of general
interest. One can only say that is a practical question for decision in each case by the tribunal—in the first place by the special commissioners, and in the second place by a court of appeal consisting of referees.
Questions of the widest interest were raised in the course of the observations of the right hon. Gentleman the Member for Chelmsford (Mr. Pretyman). Into the old and pleasant controversy between himself and myself as to whether taxes are paid out of capital or not I would not again upon this occasion enter. I fear I remain unconverted. I admit that at times the single taxpayer pays out of capital but that cannot be said to be the ease if you take the whole Income Tax of the country. Let me pass to the questions of practical detail my right hon. Friend put to me. I refer in the first place to his complaint that relief in respect of repairs and maintenance can be deferred until 1923. There are two things to make quite clear there. In the first place, the reason for the deferring of this relief is because the reassessment under Schedule A is not to come into force until 1923. At present those who pay on Schedule A are paying on an antiquated assessment which, in 99 cases out of 100 are very much undervalued. They are getting off lighter than they should under their assessment, and as long as they are getting off lighter than they should, there seems to be no obvious reason why additional relief should be given. As soon as the reassessment comes into force, under which they will be paying a fair assessment on their profits, then will be the time when it will be right and proper to give them, for the first time, this relief.

Lieut.-Colonel WHELER: Supposing it is found that the original assessments are just and fair, what happens then?

Mr. YOUNG: I think we can very well leave that for consideration when the case occurs. I am afraid my hon. and gallant Friend will not find that that becomes a very practical question in very many cases. Let me pass to the fear, expressed by my right hon. Friend in this connection. He said the result of this will be to induce people at a time of great unemployment to postpone work which would give useful employment. That is an argument which appears to have great force, but it is
really quite unfounded and is based on a misapprehension. Those who undertake the repairs and maintenance works in this year will get the benefit of the allowance in respect of the five years' average, which will come in for assessment in 1923. So there can be no reason why they should not put the work in hand at once, from the point of view of getting the benefit of the allowance. By postponing the work, they will postpone the day on which they will begin to get the benefit. On the whole, the Clause will work rather in the direction of promoting work than of preventing work.
With regard to assessors' re-assessment, the assessments in this re-assessment in 1923 will be subject to the ordinary law as at present. No change is contemplated in the law. As the right hon. Gentleman is aware, the assessment is done in the years in which there is no re-assessment by the inspectors of taxes, and in the years in which there is a re-assessment by the assessors appointed locally by the general Commissioners. That will be the case in the coming reassessment. It will be made in the way provided by the general law, by local assessors appointed by the general Commissioners.
The hon. Member for Central Edinburgh (Mr. W. Graham) took wider ground in the greater part of his argument. Much of his argument proceeded on general lines, to which it is impossible not to agree; but I must object and protest against one statement made by him. He was arguing, if I do not misrepresent him, that the big business has not made its proper contribution in respect of War profits, and in order to support that argument he threw it out as if it were a fact—indeed, as if it were an admitted fact—that in the repayment of Excess Profits Duty there had been made by the Inland Revenue big overpayments by way of repayments; in fact, that the payers of Excess Profits Duty had got back more than that to which they were entitled. He referred to high authority for his assertion. I am totally unable to imagine to what high authority he referred. I believe there has been no authority of any sort or kind for that allegation. That the Excess Profits Duty taxpayer has not in all cases paid as much as he should, I admit, but that the Inland
Revenue has let out of its hands more money than it ought I emphatically deny.
By way of support for this contention of his of big business being under-taxed, he referred to an old and now long extinct friend, the War Profits Levy. A most vivid recollection of the discussion that took place on that occasion tempts me to remind the House why it was that the War Profits Levy was, in fact, abandoned. The proposal was put forward and we sat and listened. It is most vividly within my memory that what so deeply impressed the House at that time, and was the means of leading it to reject the idea of the War Profits Levy, was the announcement by the expert advisers of the Government that the levy, in the form in which it was put forward, would have brought in less per annum than the increase of the Excess Profits Duty then proposed. I remember how, after that announcement, the War Profits Levy fell dead. We ought to be reminded of that when it is brought up against the Government that they did not adopt the best means of exacting a greater contribution from so-called big business in respect of war profits.
I pass to points of rather smaller detail, but nevertheless of great interest, raised by the hon. Member for Wood Green (Mr. G. Locker-Lampson). As I have already stated, I think in the course of a discussion in Committee last year, and on a minor Debate this year, there is no difference of opinion that the ideal manner of assessing farmers' profits is in the same manner as that of other businesses, under Schedule D, and that the direction of all reform and progress, it is truly recognised, must be by universalising Schedule D for farmers' profits. It is recognised, on the other hand, that great practical difficulties stand in the way of doing so on account of the keeping of accounts by small farmers. At the earliest possible moment all business profits should be put on the same uniform basis of Schedule D, only we have to recognise that in the case of farmers, and particularly in the case of small farmers, the earliest possible moment will be that moment at which they can be prevailed upon to keep reliable accounts.
The hon. Member referred to matters raised by Clause II of the Bill, which are very important for many investors,
large and small. He argued against the provision by which, under that Clause, we are to assess the income derived from the War stocks and so on, both for the first and the last year, and not for the year following the last. He argued in particular against assessing for the last year, for the reason that that last year might be only a partial one. The apprehensions he expressed on this subject are really unnecessary, and the Amendment which he proposes is unnecessary. Under the existing law as it stands at present, if the holding is parted with in the course of the last year, the holder gets automatically a reduction in proportion to the time he does not hold his stock. That covers his apprehension.
As to Schedule E, the hon. Member's apprehension was even more unfounded with regard to this very important little reform which is proposed in the law. I am sure the House will agree, after listening to his description of the variation of practice which prevails in assessing the income of salaried persons, wage-earners, and so on, that nothing could be more undesirable than the extraordinary variety and the uncertainty of practice to which he refers. So far from being anything in the nature of a privilege to the taxpayer, it is very much to his disadvantage that there should be this lack of uniformity between the practice of various localities.
Nothing can be more in the interests of the taxpayer than to get reasonable uniformity in this respect. We are all convinced that one of the worst drawbacks of the Income Tax is the difficulty of understanding it, and anything that can be done to make it more intelligible to any large part of the Income Tax payers is most desirable. This will lead to making the Income Tax more intelligible to that great class of taxpayers who will come under Schedule E. His apprehension as to the difficulty of assessment of men with variable incomes, such as commission, can be dealt with easily. It has been the practice hitherto of all local commissioners who are closely concerned with such taxpayers to make this arrangement that the variable portion of the income, or of the whole income if it is variable, should be assessed upon the preceding year. There is no intention of interfering with that administrative arrangement, so that it will still be possible for the commissioners to assess any variable part of the income, such as
commission, etc., upon the preceding year instead of on the actual year. So far from that being an increase of work for the overtaxed officials of the Inland Revenue, the result will be to make for very great economy of work.
In conclusion, let me refer to the more general criticism of the Government advanced by the right hon. Gentleman the Member for South Molton (Mr. Lambert), because he summed up, in so far as I have been able to detect any general line of criticism of this year's Finance Bill, what that general line has been. It is, I believe, necessary to suggest to the House, in connection with his proposed Resolution, that all such estimates of taxable capacity as that on which he based his observations are the merest guess-work, and that to base any figures of the year's Budget upon an estimate of what the annual income is in figures would be to base it on a foundation which is absolutely unreliable. On the other hand, that it is essential to regard taxable capacity in considering the limits of taxation is, of course, obvious, and, that being so, that to increase the credit of the country you must increase the country's taxable capacity. To do that there is one obvious means. That is to reduce the taxation which is imposed on that capacity. That is the design of the principal provision of this year's Budget—by reducing the taxation to increase the foundation of credit in the country, which is taxable capacity.
11.0 P.M.
There is another means. An hon. Gentleman challenged anybody replying from this bench to suggest any means by which it was possible to reduce the country's weight of Debt. I will specify one—by increasing production. By doing that you can also increase taxable capacity and return to the stage at which you will once more be able to begin to reduce Debt. If we are to do this thing, and increase credit and taxable capacity on which credit is based, we must reduce taxation. What must we do? We must reduce expenditure. Full justice was not done by the right hon. Member for South Molton to what has been done by the Government. It is not fair, in considering the efforts in this year, to state the Geddes cuts at £52,000,000. The full Geddes cuts are £64,000,000 in a full year. This is no small proportion of the total
amount represented by the Geddes Committee. The total amount of expenditure specified by the Geddes Committee was £86,000,000. A further reduction was suggested by the Committee up to £100,000,000, but how it was to be got was not suggested by the Committee. No more has it ever been suggested by anyone else in this House. £86,000,000 is the total amount of specified economy which has been laid before the House and the Government. £64,000,000 of that has been attained. What is the remainder? £12,000,000 for education and £11,000,000 for the Royal Navy. Which is it to be? At this point one feels tempted to retire from the fray and leave it to the advocates of economy in education on the one hand and to the advocates of economy on the Navy on the other hand to decide which portion of these further cuts is to be added.
Let me refer to a further observation of the right hon. Member for South Molton. He spoke in terms of derision of the "huge bureaucracy" under which this country is now saddled. I wish to offer one or two figures upon that matter. Compared with 1914, the total increase in the personnel of Government offices is 65,000. Of these, 25,000 are now employed in Ireland, leaving 40,000 to be accounted for. Of this number 22,000 are attributable to the Ministry of Pensions and 16,000 to the Ministry of Labour. I ask the House, who are so often impressed with the idea that there is a vast overstaff of unnecessary civil servants, to consider those figures not now only, but once again. They will see that the bulk of the unexplained excess of civil servants at present over the figure before the War is due to two things only—to the fact that we have to administer £91,000,000 of pensions to the War pensioners and that we have to administer unemployment benefits in relief of unemployment. Those are both War effects. Pensions to the pensioners are the unanimously-applauded remanet of the War. Unemployment benefit is the regretted but inevitable and necessary result of the great slump that follows a war. These staffs are engaged in those necessary works.
Let me say a word in earnest deprecation of the derisive tone used by the right
hon. Member for South Molton in referring to the whole Civil Service. I cannot believe that such an attitude towards the faithful servants of the country is justified in this House. These men are engaged by the State, and set to do work on behalf of this House. They are discharging the duties entrusted to them on behalf of the country. It is not theirs to question their necessity; it is not theirs to question the worth of their work. That is for the Government to consider. As long as they discharge those duties as faithfully and as strenuously as they do, surely, they should be free from such derisive references as those which have been made. It is on this Bench those references should fall; there are shoulders broad enough to bear them, but while these men are employed on behalf of the country, it should be recognised that their duties are performed by them faithfully and they are not responsible as to whether those duties should be performed or not. Let me say that the spirit which prevails in the Civil Service is, and has been, and I trust always will be, that same spirit of earnest devotion to duty which is known so well to many Members of this House, and which we find in the fighting services. It is the same devotion to their country and to duty, and I am confident it is freely recognised by hon. Members of this House. Other important considerations have arisen in the course of the Debate to which I have not time to refer. Let me close upon this note, that for the maintenance of the taxable capacity on which credit is based those things are necessary to which I have referred and they are essential in the common interest. Economy, as I ventured to argue to the House before, cannot be an act; it must be a process. We cannot disregard that fact and make a pretence of believing that such economies as we desire can be obtained by a single stroke of the pen. As has been stated on a higher field:
Eternal vigilance must be the price of liberty.
I might paraphrase that on this lower plane, and say:
Eternal parsimony must be the price of solvency.

Mr. L. MALONE: The hon. and gallant Gentleman who represents the Treasury ought to explain to the House how it
was that direct taxation and indirect taxation did not adversely affect the working class. However he only said in a few words that it was not so and proceeded with the rest of his peregrinations. I should like to take up the point where he left it. I find that out of the 5,500,000 people who are assessable for Income Tax only 445,000 benefit by this reduction of 1s. I feel that there is a danger when the next General Election comes of people not realising, owing to the complicated nature of the Income Tax that they are not benefiting, and there will be widespread misunderstanding on that point. I find from the Finance Bill statement that indirect taxation amounts to £5,457,000 whilst direct taxation amounts to £53,700,000, in addition to £3,000,000 which will become due in the course of the succeeding year. That shows, I think, quite clearly that the £5,457,000 is all the benefit which the working-class will get out of this Budget whereas £53,700,000 will be the benefit gained by the 445,000 people. Take the miner as a fair average working class man. He works hard in the pit for 8s. 6d. a day and the labourer on the surface finds it difficult to earn 26s. a week. To a man who only earns £50 or £60 a year, is it not futile to say the working classes are benefiting by the Budget? While speaking of Income Tax, I want to condemn the Government for its treatment of the manual workers and the wage earners in the matter of Income Tax. Up to this year a deduction has been allowed to wage earners for travelling expenses, but under this Bill that privilege has been withdrawn. The only comment which I think I need make on that is to read an extract from that respectable paper, the "Financial Times," which says:
The withdrawal of this privilege for the working man is, to say the least, untactful, especially as this branch of Income Tax levy is generally believed not to produce sufficient to pay for the cost of collection.

There is another point, and there again I cannot do better than quote what the "Financial Times" says about the form in which the wage-earners' tax is taken. Referring to this tax, it says:
The obnoxious quarterly wage-earners' tax,.… is unjust and inquisitorial in its application, and, moreover, costs more to collect than the net revenue from it is worth.
I hope that, when the Bill comes up in Committee, the Chancellor of the Exchequer will see his way to modify that. There is one other point that I want to raise. I want to know why we are bolstering up two Government sugar factories. Why are we giving preferential treatment to the factories at Cantley in Norfolk, and Kelham in Nottinghamshire? The former was started in 1912, closed in 1915, and reopened in 1920. It is receiving an advantage of 6s. 2⅔d. per cwt. The other factory at Kelham was set up largely with the assistance of the Government. It exhausted its capital last year, and the directors have applied to the Government for permission to borrow another £200,000. Of this second mortgage the Government have already advanced, I understand, £125,000, in addition to which the State is guaranteeing the interest of 5 per cent. for 10 years on the 250,000 shares subscribed by the public. I want to know why we are bolstering up these two companies, and at whose suggestion it was that this preferential treatment was given to them. Surely, if we have got to have State sugar factories in this country, they ought to be run with the profits curtailed and not so that certain people can make profits out of the taxpayer. I could raise many other points, but I shall defer them in detail until the Committee stage. I merely conclude by saying that this Bill is drafted simply and entirely for the landlords and the rich classes in this country.

Question put, "That the word 'now' stand part of the Question."

The House divided: Ayes, 163; Noes, 21.

Division No. 126]
AYES.
[11 15 p m.


Adkins, Sir W. Ryland D.
Barnston, Major Harry
Bruton, sir James


Amery, Leopold C. M. S.
Barrand, A. R.
Buckley, Lieut.-Colonel A.


Armstrong, Henry Bruce
Bellairs, Commander Carlyon W.
Butcher, Sir John George


Atkey, A. R.
Benn, Sir A. S. (Plymouth, Drake)
Casey, T. w.


Baird, Sir John Lawrence
Birchall, J. Dearman
Cecil, Rt. Hon. Evelyn (Birm., Aston)


Baldwin, Rt. Hon. Stanley
Boscawen, Rt. Hon. Sir A. Griffith-
Chamberlain, Rt. Hn. J. A. (Birm., W)


Balfour, George (Hampstead)
Bowyer, Captain G. W. E.
Chamberlain, N. (Birm., Ladywood)


Banbury, Rt. Hon. Sir Frederick G.
Brassey, H. L. C.
Chilcot, Lieut.-Com. Harry W.


Barlow, Sir Montague
Bridgeman, Rt. Hon. William Clive
Clay, Lieut.-Colonel H. H. Spender


Barnett, Major Richard W.
Broad, Thomas Tucker
Clough, Sir Robert


Coote, Colin Reith (Isle of Ely)
Hope, Lt.-Cot. Sir J. A. (Midlothian)
Richardson, Sir Alex. (Gravesend)


Cope, Major William
Hopkins, John W. W.
Richardson, Lt.-Col. Sir P. (Chertsey)


Courthope, Lieut.-Col. George L.
Hopkinson, A. (Lancaster, Mossley)
Roberts, Rt. Hon. G. H. (Norwich)


Curzon, Captain Viscount
Horne, Sir R. S. (Glasgow, Hillhead)
Roberts, Samuel (Hereford, Hereford)


Davidson, J. C. C.(Hemel Hempstead)
Howard, Major S. G.
Rodger, A. K.


Davidson, Major-General Sir J. H.
Hurd, Percy A.
Roundell, Colonel R. F.


Davies, Thomas (Cirencester)
Inskip, Thomas Walker H.
Royds, Lieut.-Colonel Edmund


Dawson, Sir Philip
James, Lieut.-Colonel Hon. Cuthbert
Samuel, A. M. (Surrey, Farnham)


Doyle, N. Grattan
Jephcott, A. R.
Samuel, Samuel (W'dsworth, Putney)


Du Pre, Colonel William Baring
Jodrell, Neville Paul
Sanders, Colonel Sir Robert Arthur


Edgar, Clifford B.
Kellaway, Rt. Hon. Fredk. George
Sassoon, Sir Philip Albert Gustave D.


Edge, Captain Sir William
Kidd, James
Scott, Sir Loslie (Liverp'l, Exchange)


Edwards, Major J. (Aberavon)
King, Captain Henry Douglas
Seddon, J. A.


Elliot, Capt. Walter E. (Lanark)
Lane-Fox, G. R.
Seely, Major-General Rt. Hon. John


Evans, Ernest
Lewis, Rt. Hon. J. H. (Univ., Wales)
Shortt, Rt. Hon. E. (N'castle-on-T.)


Eyres-Monsell, Com. Bolton M.
Lindsay, William Arthur
Simm, M. T.


Falcon, Captain Michael
Lloyd Greame, Sir P.
Smith, Sir Allan M. (Croydon, South)


Falle, Major Sir Bertram Godfray
Locker-Lampson, G. (Wood Green)
Stanley, Major Hon. G. (Preston)


Fell, Sir Arthur
Locker-Lampson, Com. O. (H'tingd'n)
Stephenson, Lieut.-Colonel H. K.


Fisher, Rt. Hon. Herbert A. L.
Loseby, Captain C. E.
Sugden, W. H.


FitzRoy, Captain Hon. Edward A.
Lowther, Maj.-Gen. Sir C. (Penrith)
Sykes, Sir Charles (Huddersfield)


Ford, Patrick Johnston
Macdonald, Sir Murdoch (Inverness)
Thomas, Brig.-Gen. Sir O. (Anglesey)


Forrest, Walter
Mackinder, Sir H. J. (Camlachie)
Thomson, F. C. (Aberdeen, South)


Fraser, Major Sir Keith
Marriott, John Arthur Ransome
Thomson, Sir W. Mitchell- (Maryhill)


Gange, E. Stanley
Mason, Robert
Townley, Maximilian G.


Gee, Captain Robert
Mond, Rt. Hon. Sir Alfred Moritz
Wallace, J.


Gibbs, Colonel George Abraham
Morden, Col. W. Grant
Walters, Rt. Hon. Sir John Tudor


Gilbert, James Daniel
Moreing, Captain Algernon H.
Ward, William Dudley (Southampton)


Gilmour, Lieut.-Colonel Sir John
Murray, C. D. (Edinburgh)
Watson, Captain John Bertrand


Goff, Sir R. Park
Neal, Arthur
Weston, Colonel John Wakefield


Gray, Major Ernest (Accrington)
Newman, Sir R. H. S. D. L. (Exeter)
Wheler, Col. Granville C. H.


Green, Albert (Derby)
Nicholson, Brig.-Gen. J. (Westminster)
Willey, Lieut.-Colonel F. V.


Green, Joseph F. (Leicester, W.)
Norris, Colonel Sir Henry G.
Williams, C. (Tavistock)


Greenwood, William (Stockport)
Parker, James
Windsor, Viscount


Gregory, Holman
Parkinson, Albert L. (Blackpool)
Winterton, Earl


Grenfell, Edward Charles
Parry, Lieut.-Colonel Thomas Henry
Wise, Frederick


Gritten, W. G. Howard
Pease, Rt. Hon. Herbert Pike
Wood, Hon. Edward F. L. (Ripon)


Hamilton, Major C. G. C.
Percy, Lord Eustace (Hastings)
Wood, Sir H. K. (Woolwich, West)


Harmon, Patrick Joseph Henry
Perkins, Walter Frank
Worsfold, T. Cato


Harmsworth, C. B. (Bedford, Luton)
Pellock, Rt Hon. Sir Ernest Murray
Young, E. H. (Norwich)


Haslam, Lewis
Pretyman, Rt. Hon. Ernest G.
Young, Sir Frederick W. (Swindon)


Henderson, Major V. L. (Tradeston
Purchase, H. G.



Herbert, Dennis (Hertford, Watford)
Rankin, Captain James Stuart
TELLERS FOR THE AYES.—


Hohler, Gerald Fitzroy
Raw, Lieutenant-Colonel Dr. N.
Colonel Leslie Wilson and Mr. McCurdy.


Holbrook, Sir Arthur Richard
Rawlinson, John Frederick Peel



Hood, Sir Joseph
Remer, J. R.



NOES.


Ammon, Charles George
Kenyon, Barnet
Richardson, R. (Houghton-le-Spring)


Barnes, Major H. (Newcastle, E.)
Lawson, John James
Sitch, Charles H.


Cairns, John
Lunn, William
Sutton, John Edward


Davies, Evan (Ebbw Vale)
Maclean, Nell (Glasgow, Govan)
Swan, J. E.


Gillis, William
Malone, C. L. (Leyton, E.)
Young, Robert (Lancaster, Newton)


Hayday, Arthur
Myers, Thomas



Hirst, G. H.
Naylor, Thomas Ellis
TELLERS FOR THE NOES.—


Jones, J. J. (West Ham, Slivertown)
Ramsden, G. T.
Mr. G. Barker and Mr. Halls.


Bill read a Second time, and committed to a Committee of the whole House for To-morrow.

Orders of the Day — LAW OF PROPERTY [STAMP DUTY, Etc.].

Considered in Committee. [Progress, 25th May.]

[Mr. JAMES HOPE in the Chair.]

Question again proposed,
That, for the purposes of any Act of the present Session to assimilate and amend the Law of real and personal estate, to abolish copyhold and other special tenures, to amend the Law relating to commonable lands and of intestacy, and to amend the Wills Act, 1837, the Settled Land Acts, 1882 to 1890, the Conveyancing Acts, 1881 to 1911,
the Trustee Act, 1893, and the Land Transfer Acts, 1875 and 1897, it is expedient that—

(a) Any receipt of moneys secured by a mortgage which by virtue of the said Act operates as a surrender or reconveyance shall be liable to the same stamp duty as if it were a reconveyance;
(b) There shall be charged on the Consolidated Fund of the United Kingdom, or the growing produce thereof, any deficiencies in the insurance fund established under the Land Transfer Act, 1897, in so far as such deficiencies are attributable to any rights of indemnity conferred by the said Act of the present Session;
(c) There shall be paid out of moneys provided by Parliament any compensation payable under the said Act of the present Session to officers of a local deed registry established for any
1861
riding of Yorkshire and to the county council of the riding in respect of any future loss of fees or otherwise."—[Mr. Hilton Young.]

Mr. FOOT: There is a paragraph of which I should like some further explanation—that which says—
Any receipt of moneys secured by a mortgage which by virtue of the said Act operates as a surrender or reconveyance shall be liable to the same stamp duty as if it were a reconveyance.
The Committee will know that it is one of the provisions of the Law of Property Bill, which has occupied the attention of Committee upstairs, that the re-conveyance which has previously been necessary on discharging a mortgage is to be wiped out altogether, and its place taken by a single receipt. Hitherto a re-conveyance has been required when the mortgage has been discharged, and on the payment of the mortgage money the stamp duty payable has been 6d. per cent., a very trifling charge. It is intended to maintain that charge now that the mortgage money is simply paid and an ordinary receipt given. One wonders why it should not be possible to wipe out that sixpence per cent., especially as the ordinary receipt would be given in the case of an ordinary commercial transaction. Why should sixpence per cent. be required to discharge a mortgage debt when in an ordinary commercial debt a simple stamp will meet the case. The Government might very well, in their desire to simplify and expedite dealings with property, forego this small charge, which will very often necessitate the employment of a solicitor and the document being left at the local stamp office, and where there is no stamp office it may have to be sent to London in order that a small stamp may be affixed, and this will mean delay and cost of postage. I think we might be told the amount yielded by this stamp duty. I am sure that the amount brought in is not commensurate with the trouble caused to the parties, and this would be an opportunity for the Government to prove the genuineness of their own professions in regard to cheapening the transfer of property by wiping out this small charge which will be a burden upon the persons dealing with small property.

The SOLICITOR - GENERAL (Sir Leslie Scott): This Clause leaves the law as it is in regard to stamp duties, and it is not the purpose of this Bill to alter the
revenue provisions appropriate to the Finance Bill. I agree that the charge is a small one, and that not a very large sum is involved. I urge, however, that this Law of Property Bill is intended to simplify and cheapen conveyancing, but not to release any of the charges made by the Exchequer by way of taxation. This is pure taxation, and the question raised by my hon. Friend is one of taxation and not of any reform. As a lawyer, I should be delighted to see conveyancing relieved from all taxation whatever, but the Government cannot take that view, and we are not in a position to deal with stamp duties on this occasion. Therefore I ask the Committee to say that this Clouse, which leaves things as they are, shall not be interfered with.

Mr. FOOT: Could the Solicitor-General not meet the case by allowing an adhesive stamp instead of one which has to be affixed at the office.

Sir L. SCOTT: I will consider that suggestion between now and the Report stage if I can get the Money Resolution now. Hitherto there has had to be a re-conveyance of the mortgage, but we propose to do away with that by treating a receipt as being equal to a reconveyance. The operation of the receipt will be to effect reconveyance, and the only provision of the Bill is to make the stamp duty what in law it would be on a reconveyance. In some cases there may be no reconveyance at all, and then there would be no stamp duty.

Mr. RAWLINSON: What expense is involved to the Consolidated Fund by these proposals?

Sir L. SCOTT: Under the Land Transfer Act, 1897, where a title is registered at the Land Registry, there is a guarantee given by the country to the person whose title is registered that his title is good; and when, through any accident in connection with the registration or through any mistake, loss results, an indemnity is given to the person who suffers the loss. Since 1897, the total amount of such losses in respect of which payment has been claimed, is represented by a sum of £300. Under the Act of 1897 there is built up out of the fees paid at the Registry an Insurance Fund against such insurances, and that fund to-day amounts to nearly £100,000. There is, therefore, ample security
against any possible loss which may occur. The Bill somewhat extends the provisions for the indemnity by putting the provisions of the Act of 1897 on a business-like basis. Under that Act, the occasions where the indemnity may be paid have not been very felicitously expressed in words, and this Bill makes provision for amending them in a way which has been agreed upon. I am satisfied, after consultation with the Land Registry officials, that under the Bill there is no prospect whatever of any claim really having to be made on public funds. As regards the last of the three items mentioned in the Resolution, it represents a remote and distant possibility, with which we cannot be concerned for 13 years. In Yorkshire there is what is known as a Deeds Registry—a mere registry of deeds and nothing else. In that registry certain fees are charged, and I believe that the County Council makes a slight profit out of the registry. There is power in the latter part of the Bill to make provision in the distant future for the Lord Chancellor to make an Order extending the system of compulsory registration, should it be deemed desirable at that date. If, after a competitive trial between the two systems extending over a period of 10 years, it is deemed desirable, an order may be made extending the Land Registry to Yorkshire, and then, as a result, the fees now collected by the Leeds Registry would be absorbed, and there might be a small claim by the Yorkshire County Council for the loss of its profits. These are the only financial provisions asked for in the Bill.

Mr. L. MALONE: I should not have risen had the Government adopted the suggestion I threw out on the Second Reading of this Bill. They appear to be doing everything in their power to make things as complicated as possible. From what transpired on the Second Reading, counsel will have to be consulted on every matter arising out of this Bill. But we are here to protect the interests of the general public. This Bill is putting more and more money into the hands of the legal profession.

Sir F. BANBURY: Is it in order to discuss the provisions of a Bill on a Financial Resolution which only deals with a small part of the Bill?

The CHAIRMAN: I was allowing a certain amount of time to the hon. Member to connect his remarks with the Motion before the Committee.

Mr. MALONE: This Bill has 310 pages, and I do not believe that more than a dozen Members of the House understand it. I am one of those who do not, and that is why I want to ask—

The CHAIRMAN: There are only three proposals in this Resolution, and I must ask the hon. Member to connect his argument with one or other of them.

Mr. MALONE: These paragraphs, dealing with the expenditure of money, refer to expenditure on a matter of which I have not the slightest understanding, nor have a great many hon. Members here, or the general public who are affected by the Bill. I wish to ask before the Bill comes before the House for Third Reading—

The CHAIRMAN: The Bill has not yet been reported from the Committee. It is not a question of the Third Reading. This is only to enable it to deal with three proposals, as set forth in the Resolution. Any remarks beyond these three proposals would be out of order.

Mr. MALONE: I conclude by asking that, when the Bill comes back to the House for the Report stage, this Resolution, and the Bill around it, may be in such a form that they will be understood by the lay Members of the House and by the public outside.

Mr. KILEY: I desire to emphasise the point made by the hon. Member for Bodmin (Mr. Foot) as to the absurdity of the proposal of which we are asked to approve. As I understand it, if a person pay off a £100 mortgage, instead of obtaining the ordinary stamped receipt, he is compelled to pay for dealing with these documents, possibly in London, which will entail the engaging of legal assistance, the registering of letters, and postage, so that, instead of paying sixpence, he may have to pay 20, 30 or 40 sixpences. Surely in a transaction of this kind, which amounts to a receipt for £100, the ordinary legal stamp should be sufficient. I understand that the Government's intention is to simplify the transfer of land, and surely this is a good opportunity for them to place this matter in the same position as any other transaction
involving the payment of money for which a receipt stamp is required. If it cannot be reduced from 6d. to the ordinary 2d., surely an ordinary 6d. stamp should suffice.

Mr. NEIL MACLEAN: I am one of those who are frank enough to admit that they do not understand everything that is in the Bill. I understand its title, and that is about all. I want to ask the Minister in charge of this Resolution a question with regard to paragraph (c), which says:
There shall be paid out of moneys provided by Parliament any compensation payable under the said Act of the present Session to officers of a local deed registry established for any riding of Yorkshire and to the county council of the riding in respect of any future loss of fees or otherwise.
Can he state the approximate sum which may be necessary to meet any claim for compensation in the case of these officers of local deed registers in Yorkshire? It seems to me to be a rather curious method of dealing with this situation that the House of Commons should be asked to give the Minister or the Government what is practically a blank cheque. I do not think it has been stated what is the amount of the fees derived by these officers, nor what is the probable sum that may be required to meet compensation claims made by them. Consequently I think this House ought not to let this Motion go through until the Minister gives some indication of what he expects, because I can quite conceive that the Government believe they will have to meet some compensation claims when they are inserting this Clause in the Motion. They are looking forward evidently to claims being made. Some officers may lose work for which they already receive certain remuneration, and the Government, with that wonderful regard they have for the legal profession, seem to be placing it beyond any possibility of doubt that any individuals who are in any way connected with their local registries are not going to be financial losers by the new Bill that is presently going through Committee. I should like to have some information upon this third Clause, and I hope the Minister will

inform the Committee what the Governmen considers might be the approximate sum which would be claimed by these officers or whether he anticipates that any claims are likely to be made, and, if not, what is the reason for the third Clause in the Motion?

Sir L. SCOTT: The sum is not ascertained. It is a very small sum, and it is a very remote contingency. The necessity cannot arise unless an Order is made as regards Yorkshire under the terms of the Bill, which cannot be made at the earliest for thirteen years hence and probably will not be made for many years after, and when an Order is made under the Bill a public inquiry has to take place and the Order has to lie upon the Table of both Houses, and a Resolution has to be passed approving the Order by each House of Parliament, and when that is done, if it is done in regard to the county of Yorkshire, the question of any compensation which might then be necessary to the local registry or its officers would be one of the matters which would be dealt with at the public inquiry. In these circumstances, with the assurance that the sum is bound to be in the ultimate resort quite a small sum, I shall ask the Committee to be satisfied with that explanation.

Mr. KILEY: Is it not possible to obtain some definite information about the question whether an ordinary stamp will do?

Sir L. SCOTT: I have already said it is to-day what it will be under the Bill. The stamp will be precisely the same in the future as it is to-day. The expense of stamping a document in the future will be no more than it is to-day.

Captain WEDGWOOD BENN: Do we understand from the Solicitor-General that, although this is a Money Resolution, passing through all the ordinary forms of the House, there is no public money involved this year, or even in the near future? I ask the question because it is of great interest.

Sir L. SCOTT: That is so.

Question put.

The Committee divided: Ayes, 131; Noes, 22.

Division No. 127.]
AYES.
[11.48 p.m.


Amery, Leopold C. M. S.
Baird, Sir John Lawrence
Banbury, Rt. Hon. Sir Frederick G.


Armstrong, Henry Bruce
Baldwin, Rt. Hon. Stanley
Barlow, Sir Montague


Atkey, A. R.
Balfour, George (Hampstead)
Barnston, Major Harry


Barrand, A. R.
Green, Joseph F. (Leicester, W.)
Ramsden, G. T.


Bollairs, Commander Carlyon W.
Greenwood, William (Stockport)
Rankin, Captain James Stuart


Boscawen, Rt. Hon. Sir A. Griffith-
Hallwood, Augustine
Raw, Lieutenant-Colonel Dr. N.


Bowyer, Captain G. W. E.
Hamilton, Major C. G. C.
Rawlinson, John Frederick Peel


Brassey, H. L. C.
Hannon, Patrick Joseph Henry
Remer, J. R.


Bridgeman, Rt. Hon. William Clive
Harmsworth, C. B. (Bedford, Luton)
Richardson, Sir Alex. (Gravesend)


Broad, Thomas Tucker
Henderson, Major V. L. (Tradeston)
Richardson, Lt.-Col. Sir P. (Chertsey)


Bruton, Sir James
Herbert, Dennis (Hertford, Watford)
Roberts, Rt. Hon. G. H. (Norwich)


Buckley, Lieut.-Colonel A.
Hohler, Gerald Fitzroy
Roberts, Samuel (Hereford, Hereford)


Casey, T. W.
Holbrook, Sir Arthur Richard
Roundell, Colonel R. F.


Cecil, Rt. Hon. Evelyn (Birm., Aston)
Hope, Lt.-Col. Sir J. A. (Midlothian)
Royds, Lieut.-Colonel Edmund


Chamberlain, Rt. Hn. J. A. (Birm., W.)
Hopkinson, A. (Lancaster, Mossley)
Samuel, A. M. (Surrey, Farnham)


Chamberlain, N. (Birm., Ladywood}
Howard, Major S. G.
Samuel, Samuel (W'dsworth, Putney)


Chlicot, Lieut.-Com. Harry W.
Jodrell, Neville Paul
Sanders, Colonel Sir Robert Arthur


Clough, Sir Robert
Kellaway, Rt. Hon. Fredk. George
Scott, Sir Leslie (Liverp'l, Exchange)


Coote, Colin Reith (Isle of Ely)
Kidd, James
Seddon, J. A.


Cope, Major William
King, Captain Henry Douglas
Shortt, Rt. Hon. E. (N'castle-on-T.)


Courthope, Lieut.-Col. George L.
Lane-Fox, G. R.
Smith, Sir Allan M. (Croydon, South)


Davidson, J. C. C. (Hemel Hempstead)
Lewis, Rt. Hon. J. H. (Univ., Wales)
Stanley, Major Hon. G. (Preston)


Davidson, Major-General Sir J. H.
Lindsay, William Arthur
Stephenson, Lieut.-Colonel H. K.


Davies, Thomas (Cirencester)
Lloyd-Greame, Sir P.
Sugden, W. H.


Dawson, Sir Philip
Locker-Lampson, Com. O. (H'tingd'n)
Sykes, Sir Charles (Huddersfield)


Doyle, N. Grattan
Loseby, Captain C. E.
Thomas, Brig.-Gen. Sir O. (Anglesey)


Du Pre, Colonel William Baring
Lowther, Maj.-Gen. Sir C. (Penrith)
Thomson, F. C. (Aberdeen, South)


Edge, Captain Sir William
Macdonald, Sir Murdoch (Inverness)
Thomson, Sir W. Mitchell- (Maryhill)


Edwards, Major J. (Aberavon)
Mackinder, Sir H. J. (Camlachie)
Townley, Maximilian G.


Elliot, Capt. Walter E. (Lanark)
Marriott, John Arthur Ransome
Ward, William Dudley (Southampton)


Evans, Ernest
Mason, Robert
Watson, Captain John Bertrand


Eyres-Monsell, Com. Bo'ton M.
Mond, Rt. Hon. Sir Alfred Moritz
Weston, Colonel John Wakefield


Falcon, Captain Michael
Morden, Col. W. Grant
Wheler, Col. Granville C. H.


Falle, Major Sir Bertram Godfray
Moreing, Captain Algernon H.
Williams, C. (Tavistock)


Fisher, Rt. Hon. Herbert A. L.
Murray, C. D. (Edinburgh)
Windsor, Viscount


FitzRoy, Captain Hon. Edward A.
Neal, Arthur
Winterton, Earl


Ford, Patrick Johnston
Newman, Sir R. H. S. D. L. (Exeter)
Wise, Frederick


Forrest, Walter
Parker, James
Wood, Hon. Edward F. L. (Ripon)


Foxcroft, Captain Charles Talbot
Parkinson, Albert L. (Blackpool)
Wood, Sir H. K. (Woolwich, West)


Fraser, Major Sir Keith
Parry, Lieut.-Colonel Thomas Henry
Young, E. H. (Norwich)


Gibbs, Colonel George Abraham
Pease, Rt. Hon. Herbert Pike
Young, Sir Frederick W. (Swindon)


Gilbert, James Daniel
Percy, Lord Eustace (Hastings)



Gilmour, Lieut.-Colonel Sir John
Perkins, Walter Frank
TELLERS FOR THE AYES.—


Goff, Sir R. Park
Pollock, Rt. Hon. Sir Ernest Murray
Colonel Leslie Wilson and Mr. McCurdy.


Green, Albert (Derby)
Pretyman, Rt. Hon. Ernest G.



NOES.


Ammon, Charles George
Kiley, James Daniel
Royce, William Stapleton


Barnes, Major H. (Newcastle, E.)
Lawson, John James
Smith, W. R. (Wellingborough)


Benn, Captain Wedgwood (Leith)
Lunn, William
Sutton, John Edward


Collins, Sir Godfrey (Greenock)
Maclean, Nell (Glasgow, Govan)
Swan. J. E.


Gillis, William
Malone, C. L. (Leyton, E.)
Thorne, G. R. (Wolverhampton, E.)


Halls, Walter
Raffan, Peter Wilson



Hartshorn, Vernon
Richardson, R. (Houghton-le-Spring)
TELLERS FOR THE NOES.—


Hirst, G. H.
Roberts, Frederick O. (W. Bromwich)
Mr. George Barker and Mr. Foot.


Jones, J. J. (West Ham, Silvertown)




Question put, and agreed to.

Resolution reported.

Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."

Mr. RAFFAN: Shall I be in order in moving to leave out paragraph (a)?

Mr. SPEAKER: I have already put the Question, "That this House doth agree with the Committee in the said Resolution."

Mr. RAFFAN: Then shall I not be in order.

Mr. SPEAKER: No.

Mr. RAFFAN: Shall I be in order in raising my point on the Resolution itself?

Mr. SPEAKER: Yes.

Mr. RAFFAN: The hon. Member in charge of the Bill should realise that there is a considerable amount of feeling in reference to this particular matter. He has himself admitted that the amount of revenue secured is extremely small. It is evident that if the provision continues there must be a considerable amount of inconvenience. He must be aware that his argument that he is making no change whatever in the charge is apart from the circumstances, because he is altering the whole position on which the charge is working. We would like some assurance that this matter will be considered with a view to action being taken if it is found that the amount of revenue is smaller.

Sir L. SCOTT: The position is this to-day, that the wicked Treasury accepts
a tax when you make a mortgage and accepts another when you pay it off. The Bill, which is not concerned with the wickedness of the Treasury, leaves things as they are in this respect. The Bill will not come into force until 1925. Between now and 1925 there will be at least two Finance Bills on which the question can be raised.

Mr. KILEY: An ordinary 6d. stamp, whether I. have to send a document to London or—

Mr. SPEAKER: That point cannot arise on this Resolution.

Mr. KILEY: I understand that it does.

Mr. SPEAKER: I assure the hon. Member that it does not.

Captain W. BENN: In Committee this point as to the stamp was raised and I understood the hon. and learned Gentleman to say that before the Report stage he would consider it. That is why I am surprised at this Resolution being taken so soon on Report. When is the right hon. Gentleman going to consider it?

Mr. SPEAKER: In my view, it is not in order to raise that point on this Money Resolution. The point may be raised on the Bill in Committee, or on Report.

Orders of the Day — NATIONAL HEALTH INSURANCE [EXPENSES].

Considered in Committee, under Standing Order No. 71A.

[Mr. JAMES HOPE in the Chair.]

Motion made, and Question proposed,
That, for the purposes of any Act of the present Session to make further provision with respect to the cost of medical benefit and to the expenses of the administration of benefits under the Acts relating to National Health Insurance, to repeal Section two and to amend Section twenty-nine of the National Health Insurance Act, 1918, and for purposes connected therewith, it is expedient to authorise the amount which, under the said Act, will, on the next valuation of an approved society, become payable, out of moneys provided by Parliament, to the society in respect of the sums paid out of the benefit fund of the society, in pursuance of the said Act, towards the cost of medical benefit and the expenses of the administration of benefits, to be calculated as if those sums were increased by interest thereon from the date of payment at the rate prescribed for the purposes of paragraph (c) of Sub-
section (1) of Section fifty-six of the National insurance Act, 1911"—(King's Recommendation signified).—[Mr. Hilton Young.]

12 M.

Sir F. BANBURY: On a point of Order. This Resolution and the Resolution which appeared last week are in somewhat unusual form. They appear under Standing Order No. 71A, which I hold in my hand, and which says:"King's recommendation to be signified." I may be wrong, but I never remember Financial Resolutions being taken in this form before. There has always been a Committee set up—at which the Assent has been signified—and then on the following day, or the day after, the Committee stage has been taken. Standing Order 71A says:
Notwithstanding any Standing Order or custom of the House, if notice is given of a Resolution authorising; expenditure in connection with a Bill, the House may, if the Recommendation of the Crown is signified thereto. …
So far as I know, the Recommendation of the Crown has not been signified, and the Order says it is to be signified. It seems to me that not only is this an unusual course, but it is contrary to Standing Order 71A, which, as far as I know, has never been carried out, and has practically not been used. I should like to know, first of all, whether the King's Recommendation has been signified, when it was signified, and who signified it. I should also like to know why it is that we have departed from the ordinary custom and have taken the Resolution in an unusual form.

Mr. HILTON YOUNG: As the Resolution appears in my name, possibly I may say a word on the point of Order in order to explain the course adopted. As the right hon. Baronet the Member for the City (Sir F. Banbury) is aware, Standing Order 71A says:
Notwithstanding any Standing Order or custom of the House, if notice is given of a Resolution authorising expenditure in connection with a Bill, the House may, if the Recommendation of the Crown is signified thereto, at any time after such notice appears on the Paper, resolve itself into Committee to consider the Resolution, and the Resolution, when reported, may be considered forthwith by the House.
The only difference between this and the procedure which the right hon. Baronet found more desirable is one of the convenience of the House. Under this form of procedure the necessity for the
formal step of the setting-up Resolution is avoided, and instead of that, under this Standing Order, the Resolution has to appear on the Paper so that the House has notice of it. Then, after it has appeared on the Paper, the House can go straight into Committee on the Money Resolution. That, of course, has this convenience—it avoids what has become a mere formality, namely, the setting-up Resolution, on which, as the right hon. Baronet is well aware, there can be neither discussion nor division. It is, therefore, quite valueless to the House, but what is of value to the House is that it should have notice of the terms of the Resolution. The purpose of the procedure under Standing Order 71A is to avoid the trouble of a setting-up Resolution but, to give notice to the House of the actual terms.

Sir F. BANBURY: Where does the King's Recommendation come in?

Mr. YOUNG: I had forgotten that point. The King's Recommendation was signified in the usual manner a few moments ago by the Minister of Health. That is the customary procedure.

Sir F. BANBURY: I did not see the right hon. Gentleman doing it.

Sir A. MOND: I did so according to the usual form.

Sir F. BANBURY: In any case the Financial Secretary tells us that this procedure avoids the setting up of the Resolution, which is useless because it allows neither debate nor division. That is quite true, but unless I am very much mistaken in the case of the ordinary Money Resolution we cannot take the Committee stage and the Report stage on the same day. Under this procedure we can do so. Apparently it is within the rules to take a Money Resolution in Committee at 12 midnight, and to take the Report stage immediately afterwards. That may be for the convenience of the Government, but it is certainly not for the convenience of the House.

The CHAIRMAN: I am afraid the usual vigilance of the right hon. Baronet was for once at fault some three years ago when this Standing Order was passed.

Captain W. BENN: I listened with great interest to the explanation of the
Financial Secretary and, with respect, I venture to say that he was wrong on every point with which he dealt. He said that in these cases, the question put from the Chair, that the House resolve itself into Committees could not be divided upon. I submit that any question put from the. Chair can be divided upon. He also said that it was a coincidence to out the Resolution on the Paper under the recommendation of the Committee on National Expenditure—

The CHAIRMAN: I understood the hon. and gallant Member intended to raise a point of Order. He is not in order in discussing the merits of the Standing Order. He may discuss the Resolution before the Committee or raise a point of Order, but it does not appear to me lie is doing either.

Captain BENN: I was proposing, before asking the Minister of Health a question, to say something in reference to the procedure under which the Resolution is brought forward. I submit I am entitled, in passing, to refer to the financial methods adopted by the Government as illustrated by the way in which the Resolution is being submitted.

The CHAIRMAN: If the hon. and gallant Member goes into that an unlimited opportunity will be given for debating all sorts of points of procedure. The hon. and gallant Member must confine himself to the merits of the Resolution unless he has a point of Order to raise.

Mr. N. MACLEAN: On a point of Order. As there seems to be a question in dispute, would it not be in order to move to report Progress, so that we may discuss the method in which the Government have brought the Resolution before us?

The CHAIRMAN: It would be in order to move to report Progress. As to whether or not the arguments used by the hon. Member in supporting that Motion, would be in order or not, I must wait, and see.

Mr. MACLEAN: I beg to move, "That the Chairman do report Progress, and ask leave to sit again."
I am not going to use any arguments. I prefer to leave that to hon. Members who have been longer associated with the
House and have taken a greater interest in the framing and the interpretation of the Standing Orders. It is in order to overcome the difficulty that has arisen in regard to the way in which the hon. and gallant Member for Leith (Captain W. Benn) is placed, in being pulled up to order by you, Air. Chairman, putting him entirely out of order in discussing the question, that I move to report Progress. If there be a matter of dispute as to the question being brought. forward legitimately under this Standing Order, I submit that Members are entitled to know thepros andcons, and I should like to know exactly how we are going to be situated if, on a question that is in doubt, the Government are able to bring into this House at such short notice a Resolution that they can put before the Committee and also bring up again almost

immediately on Report. I want to get the matter settled beyond all doubt.

The Chairman, being of opinion that the Motion was an abuse of the Rules of the House, rose to put the Question thereupon forthwith.

Captain BENN: Mr. Hope, I should like—

The CHAIRMAN: I will put this Question at once, under Standing Order 22.

Captain BENN: But I—

The CHAIRMAN: I have every discretion in this matter, and the Standing Order is perfectly clear.

Question put, "That the Chairman do report Progress, and ask leave to sit again."

The Committee divided: Ayes, 23; Noes, 111.

Division No. 128.]
AYES.
[12.15 a.m.


Ammon, Charles George
Hirst, G. H.
Smith, W. R. (Wellingborough)


Banbury, Rt. Hon. Sir Frederick G.
Jones, J. J. (West Ham, Silvertown)
Sutton, John Edward


Barker, G. (Monmouth, Abertillery)
Kiley, James Daniel
Swan, J. E.


Barnes, Major H. (Newcastle, E.)
Lawson, John James
Thomas, Brig.-Gen. sir O. (Anglesey)


Benn, Captain Wedgwood (Leith)
Lunn, William
Thorne, G. R. (Wolverhampton, E.)


Collins, Sir Godfrey (Greenock)
Malone, C. L. (Leyton, E.)



Gillis, William
Raffan, Peter Wilson
TELLERS FOR THE AYES.—


Halls, Walter
Richardson, R. (Houghton-le-Spring)
Mr. Neil Maclean and Mr. Foot.


Hartshorn, Vernon
Roberts, Frederick O. (W. Bromwich)



NOES.


Amery, Leopold C. M. S.
Forrest, Walter
Neal, Arthur


Armstrong, Henry Bruce
Foxcroft, Captain Charles Talbot
Newman, Sir R, H. S. D. L. (Exeter)


Atkey, A. R.
Fraser, Major Sir Keith
Parker, James


Baird, Sir John Lawrence
Gibbs, Colonel George Abraham
Parkinson, Albert L. (Blackpool)


Baldwin, Rt. Hon. Stanley
Gilbert, James Daniel
Parry, Lieut.-Colonel Thomas Henry


Balfour, George (Hampstead)
Gilmour, Lieut.-Colonel Sir John
Pease, Rt. Hon. Herbert Pike


Barlow, Sir Montague
Goff, Sir R. Park
Percy, Lord Eustace (Hastings)


Barnston, Major Harry
Green, Joseph F. (Leicester, W.)
Perkins, Walter Frank


Barrand, A. R.
Greenwood, William (Stockport)
Pollock, Rt. Hon. Sir Ernest Murray


Boscawen, Rt. Hon. Sir A. Griffith-
Hallwood, Augustine
Rankin, Captain James Stuart


Brassey, H. L. C.
Hamilton, Major C. G. C.
Raw, Lieutenant-Colonel Dr. N.


Bridgeman, Rt. Hon. William Clive
Hannon, Patrick Joseph Henry
Remer, J. R.


Bruton, Sir James
Harmsworth, C. B. (Bedford, Luton)
Richardson, Sir Alex. (Gravesend)


Buckley, Lieut.-Colonel A.
Henderson, Major V. L. (Tradeston)
Richardson, Lt.-Col. Sir P. (Chertsey)


Casey, T. W.
Herbert, Dennis (Hertford, Watford)
Roberts, Rt. Hon. G. H. (Norwich)


Chamberlain, Rt. Hn. J. A. (Birm. W.)
Holbrook, Sir Arthur Richard
Roberts, Samuel (Hereford, Hereford)


Chamberlain, N. (Birm., Ladywood)
Hope, Lt.-Col. Sir J. A. (Midlothian)
Roundell, Colonel R. F.


Chilcot, Lieut.-Com. Harry W.
Hopkinson, A. (Lancaster, Mossley)
Royds, Lieut.-Colonel Edmund


Clough, Sir Robert
Kellaway, Rt. Hon. Fredk. George
Samuel, A. M. (Surrey, Farnham)


Coote, Colin Reith (Isle of Ely)
Kidd, James
Samuel, Samuel (W'dsworth, Putney)


Cope, Major William
King, Captain Henry Douglas
Sanders, Colonel Sir Robert Arthur


Courthope, Lieut.-Col. George L.
Lewis, Rt. Hon. J. H. (Univ., Wales)
Scott, Sir Leslie (Liverp'l, Exchange)


Davidson, J. C. C. (Hemel Hempstead)
Lindsay, William Arthur
Seddon, J. A.


Davidson, Major-General Sir J. H.
Lloyd-Greame, Sir P.
Shortt, Rt. Hon. E. (N'castle-on-T.)


Davies, Thomas (Cirencester)
Locker-Lampson, Com. O. (H'tingd'n)
Smith, Sir Allan M. (Croydon, South)


Doyle, N. Grattan
Losaby, Captain C. E.
Stanley, Major Hon. G. (Preston)


Edge, Captain Sir William
Lowther, Maj.-Gen. Sir C. (Penrith)
Stephenson, Lieut.-Colonel H. K.


Edwards, Major J. (Aberavon)
Macdonald, Sir Murdoch (Inverness)
Sugden, W. H.


Elliot, Capt. Walter E. (Lanark)
Mackinder, Sir H. J. (Camlachie)
Sykes, Sir Charles (Huddersfield)


Evans, Ernest
Marriott, John Arthur Ransome
Thomson, Sir W. Mitchell- (Maryhill)


Eyres-Monsell, Com. Bolton M.
Mason, Robert
Ward, William Dudley (Southampton)


Falcon, Captain Michael
Mond, Rt. Hon. Sir Alfred Moritz
Watson, Captain John Bertrand


Falle, Major Sir Bertram Godfray
Morden, Col. W. Grant
Wheler, Col. Granville C. H.


Fisher, Rt. Hon. Herbert A. L.
Moreing, Captain Algernon H.
Williams, C. (Tavistock)


Ford, Patrick Johnston
Murray, C. D. (Edinburgh)
Windsor, Viscount


Winterton, Earl
Wood, Sir H. K. (Woolwich, West)
TELLERS FOR THE NOES.—


Wise, Frederick
Young, E. H. (Norwich)
Colonel Leslie Wilson and Mr. McCurdy.


Wood, Hon. Edward F. L. (Ripon)
Young, Sir Frederick W. (Swindon)



Question put, and agreed to.

Original Question again proposed.

Captain BENN: On a point of Order. The hon. Member for Govan (Mr. N. Maclean) moved to report Progress on the ground that it was an abuse of Standing Order 71A that financial matters should be hurried through. You, Mr. Chairman, put the Motion without permitting any Amendment or Debate. May I ask whether you did that under the Standing Order which states that you may put such a Motion if you are of opinion it is an abuse of the Rules of the House?

The CHAIRMAN: That was the ground on which I acted. The hon. Member who moved to report Progress said he proposed it, but did not propose to put forward any arguments.

Captain BENN: It is not conceivable, I take it, that this extremely intelligible Resolution is to be allowed to speak for itself, and the Committee and Report stages hurried through at half an hour after midnight without any account of how much is involved or what the meaning of it all is. I think that would be really treating the House of Commons with even less respect than even this Government is wont to show to it. That being so, I do urge the Minister of Health to make clear, in that lucid manner of which he is a master, exactly what it is we are voting by these dozen lines that are in this Resolution on the Order Paper.

The MINISTER of HEALTH (Sir A. Mond): It was through no lack of courtesy on my part that I did not rise. I thought hon. Members would probably want to ask questions to which I could reply. I shall endeavour to oblige my hon. and gallant Friend by very briefly explaining the purport of this Resolution. It will be remembered that the other day we gave a Second Reading to the Bill and the Financial Resolution is necessary before arrangements can be made with the Treasury. I pointed out on 24th May that under the present proposal the money paid in medical benefit and coming from the funds of the approved societies will be treated in the general account in the same way as any other benefit payment, but it will carry automatically with it the two-ninths of State grant which
would therefore be permanently lost to societies unless a Financial Resolution of this kind were passed. Under the provisions of the Bill this State grant will be paid after April, 1925, in respect of £3,400,000 which will be taken out of the insurance fund during the next twenty-one months for the relief of the Exchequer. I hope that is clear. The money if left in the fund would have accumulated at compound interest. We do not want the approved societies to suffer and therefore a Financial Resolution is necessary. The upshot will be a State grant of £180,000 a year for five years beginning on the 1st of April, 1925. That means altogether about £900,000 and there will be about £140,000 in respect of interest.

Sir GODFREY COLLINS: As I understand, under the terms of this Resolution the sum of £140,000 will be paid from State funds to the approved societies at the next valuation. I want to know if there will be a Supplementary Estimate this year for that amount?

Sir A. MOND: No, not for that amount. It will take five years to accumulate.

Sir G. COLLINS: Will this particular Financial Resolution lead to a Supplementary Estimate? Can the right hon. Gentleman give us any assurance on that point? I was hoping that the right hon. Gentleman might be able to tell us definitely whether a Supplementary Estimate will be brought forward daring the ensuing year. The Chancellor of the Exchequer has already assured the Committee that the provision for Supplementary Estimates was amply covered already, but the amount to date is very considerable, and I hope we shall have some further assurance on this point.
The right hon. Gentleman will recollect that this particular Resolution deals with the administration of approved societies, and that last year he held out some hope that the Insurance Acts would be consolidated. Such a consolidation would simplify the administration of approved societies, which are administered partly out of money provided by Parliament and partly out of money provided by the insured persons themselves.
The administration expenses of the National Insurance Acts are heavy. Last year the right hon Gentleman had hopes that this year he would be able to bring in a Bill to consolidate the Insurance Acts. Can we have some assurance that those hopes will mature in the course of the present year? The administration of the different Insurance Acts would be simplified thereby, and the amount to be set apart for administration expenses would be reduced, with the result that not only would there be a saving of money to the National Exchequer, but that larger benefits would be paid to the insured persons.

Mr. AMMON: Alter the very lucid statement by the Minister of Health, clarified by the hon. Gentleman who has just sat down, I should like to put this question, bluntly: Are we to understand that this is really to enable the accumulated funds of the societies to be raided in order to provide money?

Sir A. MOND: Not at all; for the very opposite purpose. But for this Financial Resolution the approved societies would lose something like £900,000 and the Treasury would be that much better off. In reply to the hon. and gallant Member for Leith (Captain W. Benn), I find no Supplementary Estimate will be required, because no payment will have to be made before 1925. As to the question of the hon. Member for Greenock (Sir G. Collins), I quite remember the discussion we had, and that matter of consolidation is being very carefully studied at the present time; but I cannot say whether it will be possible to introduce legislation to deal with the subject.

Mr. N. MACLEAN: I wish to ask the right hon. Gentleman whether the idea of this Resolution is to repeal, as it says in the Resolution, Section 2 of the Act of 1918? Does that refer to the Women's Equalisation Fund, or to what does it refer? I have a copy of that Act, and Section 2 refers to the Women's Equalisation Fund. I will read it to hon. Members:

"(1) There shall be established under the control of the National Health Insurance Joint Committee a fund to be called the Women's Equalisation Fund and to be applied in assisting approved societies in meeting their liabilities in respect of the sickness claims of women.
1878
(2) There shall in each year be charged on the Women's Equalisation Fund and distributed among approved societies in manner provided by a scheme to be made by the National Health Insurance Joint Committee, with the approval of the Treasury, such sum, not exceeding eight shillings, in respect of each of the total number (calculated in the prescribed manner) of married women who are members of approved societies and who are employed contributors, as may be ascertained in accordance with the said scheme.
(3) Subject as hereinafter provided, there shall, in respect of each year, be carried to the Women's Equalisation Fund out of moneys provided by Parliament such sum as will suffice to meet the charges thereon:
Provided that the suns to be tarried to the Fund in respect of each of the years nineteen hundred and thirteen, nineteen hundred and fourteen, nineteen hundred and fifteen, and nineteen hundred and sixteen, shall, instead of being provided as aforesaid, be provided out of the moneys voted by Parliament before the commencement of this Act in aid of the provision of sickness benefit for women and in so far as the moneys so voted are insufficient to meet the aggregate charges on the fund in respect of those four years shall be provided out of the moneys applicable towards discharging the liabilities of the insurance Commissioners to approved societies in respect of reserve values.
(4) All sums distributed among societies under this Section shall be available for the payment of benefits, and shall, for the purposes of Section three of the principal Act, be deemed to have been derived from contributions made in respect of contributors, notwithstanding that they are derived in whole or in part from moneys provided by Parliament."
Then you have also a reference to Section 29 in the same Act. Can the right hon. Gentleman explain Section 2?

Sir A. MOND: On a point of Order. There is nothing in the Financial Resolution dealing with Section 2.

Mr. MACLEAN: May I draw your attention to what it states here in the Financial Resolution—
to repeal Section two and to amend Section twenty-nine.

Sir A. MOND: This Financial Resolution merely recites the fact. It is the Bill which will repeal Section 2. The Resolution merely states that it is expedient to authorise the amount which, under the said Act, becomes payable out of the moneys payable by Parliament. That has no relation to Section 2.

The CHAIRMAN: The Resolution sets out that it is expedient to do certain things for the purpose of any Act of the present Session, and by way of definition
of that Act—which is, of course, at present a Bill—it mentions Section 2 and Section 29 of the National Health Insurance Act, 1918. How far it is in order to go into detail about those two Sections I am not quite clear. If the right hon. Gentleman says these two Sections are only introduced for technical reasons, and that the operative part of the Resolution has nothing to do with it, I shall not allow any further discussion.

Sir A. MOND: That was my point. The repeal of these Sections is merely declaratory of the purposes of the Bill. It is a Financial Resolution. This has no connection with the Women's Fund.

The CHAIRMAN: After that declaration by the right hon. Gentleman, I think it will not be in order to discuss those two Sections. It will be in order to discuss them on the Bill.

Mr. MACLEAN: I think it will be within your recollection that I asked the right hon. Gentleman who is in charge of the Resolution, what Section 2 meant? He seemed to be in doubt about it.

Sir A. MOND: I can tell the hon. Member all about Section 2—we discussed it a long time on Second Reading, when the hon. Member apparently was not present—but I do not think it is in order to discuss it now.

Mr. MACLEAN: I am talking about what this particular Financial Resolution refers to.

The CHAIRMAN: It is quite clear that the hon. Member cannot discuss the references. After the explanation of the
right hon. Gentleman, it is now quite clear that the reference to the two Sections is merely for the purpose of defining the Bill in respect of which this Resolution is passed; but the Resolution itself does not affect these two Clauses at all, and therefore it cannot be in order to pursue the matter.

Mr. MACLEAN: Is the purpose of this Financial Resolution not in relation to these two particular Sections of the National Health Insurance Act, 1918? I f it is not in connection with them, what is the use of referring in a Financial Resolution to two Sections of a particular Act? The Resolution must have something to do with those two Sections. What is the use of the Committee being referred to them? I put that as a point of Order.

The CHAIRMAN: It is quite clear that the bringing in of these two Sections is merely, as it were, to define the Bill. But the actual Resolution itself has no reference to these particular Sections, and I have already ruled that they cannot be put.

Resolution to be reported To-morrow.

The remaining Orders were read, and postponed.

It being after half-past Eleven of the Clock upon Monday evening, Mr. DEPUTY-SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.

Adjourned at Ten minutes before One o'Clock.